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Understanding The Merits Of Invoice Factoring For Your Business in 2017

Understanding The Merits Of Invoice Factoring For Your Business in 2017

The majority of businesses get stuck financially not because they lack money but due to the fact that they cannot access their hard cash. Sometimes, clients may delay payments for up to 90 days. During this period, a company can make use of invoice factoring to keep the business afloat. We will look into all that you need to know about invoice factoring and the merits it has for your business.

What is Invoice Factoring?

Many terms can define invoice factoring. For example, you may hear some calling it “invoice financing” and others calling it “accounts receivable factoring”. All these names mean the same thing, which is invoice factoring.

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Invoice factoring is the process of ‘selling’ owed invoices to a lender. Broadly speaking, it allows you to use your money before you receive it. There are more than enough benefits to make invoice factoring worthwhile for your business. We will highlight some of the merits of invoice factoring for your business.

Quick Access to Cash

One of the many reasons invoice factoring is important to your business is because it allows you to get quick approval of loans from banks when you need the money. The majority of small and medium-sized businesses have a major problem in accessing bank loans or any other form of financial assistance. However, invoice factoring makes it easy. You can process a loan within a day or two if you are using invoice factoring services. However, it is important to note that the amount of money you get as a loan is purely dependent on the sum of your outstanding invoices. Most likely, a bank will give you a loan for 90% of your outstanding invoices.

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Relief from Invoice Collecting

One of the hardest tasks businesses face is collecting invoices. For a small business, this may mean employing new staff to follow up on such matters. It is clear that such a move is likely to raise the cost of operation of a business. If you can find a good company offering invoice factoring services, you will not have to follow up on your clients to get your money. You can use your money without hustling to get it. It is a relief, especially if you are dealing with clients who are notorious for not paying debts on time or at all.

Meet the Daily Customer Demand

It is easy for a small or medium-sized business to be forced to close down simply because they cannot meet the daily demands of customers. A company with outstanding invoices can fail to provide for its daily costs of operation if it does not use invoice factoring. Invoice factoring helps the company to get the money needed to keep the daily activities of the business running to meet the customer demand.

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Filling Large Customer Orders

With invoice factoring, you do not have to let go of large orders. When you have a customer with a large order, you can seek money and attend to that order instead of letting that offer go simply because you do not have enough money to attend to the order. This is a benefit to both small and medium-sized businesses that are still seeking opportunities to get hold of large orders. Therefore, when such orders come, such businesses should use all the possible resources they have access to, including invoice factoring, to get hold of the order.

Easy Approval Criteria

Not only does invoice factoring give you a way of getting bank loans, but it also provides ways to get such loans the easy way. With invoice factoring, you do not need to add your personal assets as security for the loan for which you are applying. This means that you can apply for and get a loan very quickly without having to go back to your list of assets.

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As discussed above, it is clear that invoice factoring is very beneficial to your business. You should consider using this option so that you can enjoy the above benefits plus many others.

Featured photo credit: FactoringCompanies198 via flickr.com

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Deborah Belford

Freelance journalist

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Last Updated on August 6, 2020

Why Working 9 to 5 Is Outdated

Why Working 9 to 5 Is Outdated

Bristol is the most congested city in England. Whenever I have to work at the office, I ride there, like most of us do. Furthermore, I always make sure to go at off hours; otherwise, the roads are jam-packed with cars, buses, bikes, even pedestrians. Why is that? Because everyone is working a traditional 9 to 5 work day.

Where did the “9 to 5” Come From?

It all started back in 1946. The United States government implemented the 40 hour work week for all federal employees, and all companies adopted the practice afterwards. That’s 67 years with the same schedule. Let’s think about all the things that have changed in the 67 years:

  • We went to the moon, and astronauts now live in space on the ISS.

  • Computers used to take up entire rooms and took hours to make a single calculation. Now we have more powerful computers in our purses and back pockets with our smartphones.

  • Lots of employees can now telecommute to the office from hundreds, and even thousands of miles away.

In 1946 a 9-5 job made sense because we had time after 5pm for a social life, a family life. Now we’re constantly connected to other people and the office, with the Internet, email on our smartphones, and hashtags in our movies and television shows. There is no downtime anymore.

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Different Folks, Different Strokes

Enjoying your downtime is an important part of life. It recharges your batteries and lets you be more productive. Allowing people to balance life and work can provide them with much needed perspective and motivation to see the bigger picture of what they are trying to achieve.

Some people are just more productive when they’re working at their optimal time of day, after feeling well rested and personally fulfilled.  For some that can be  from 4 a.m. to 9 a.m; for others, it could be  2 p.m. to 7 p.m.

People have their own rhythms and routines. It would be great if we could sync our work schedule to match. Simply put, the imposed 8-hour work day can be a creativity and morale killer for the average person in today’s world.

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Productivity and Trust Killer

Fostering creativity among employees is not always an easy endeavor, but perhaps a good place to start is by simply not tying their tasks and goals to a fixed time period. Let them work on their to-do list at their own pace, and chances are, you’ll get the best out of your employee who feels empowered instead of babysat.

That’s not to say that you should  allow your team to run wild and do whatever they want, but restricting them to a 9 to 5 time frame can quickly demoralize people. Set parameters and deadlines, and let them work at their own creative best with the understanding that their work is crucial to the functioning of the entire team.

Margaret Heffernan, an entrepreneur who previously worked in broadcasting, noted to Inc that from her experience, “treating employees like grown-ups made it more likely that they would behave the same way.” The principle here is to have your employees work to get things done, not to just follow the hands on the clock.

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A Flexible Remote Working Policy

Yahoo CEO Marissa Mayer famously recalled all her remote workers, saying she wanted to improve innovation and collaboration, but was that the right decision? We’ve all said that we’re often more productive in a half day working from home than a full day working in the office, right? So why not let your employees work remotely from home?

There are definitely varying schools of thought on remote working. Some believe that innovation and collaboration can only happen in a boardroom with markers, whiteboards and post-it notes and of course, this can be true for some. But do a few great brainstorms trump a team that feels a little less stressed and a little more free?

Those who champion remote working often note that these employees are not counting the clock, worried about getting home, cooking dinner or rushing through errands post-work. No one works their 9-5 straight without breaks here and there.  Allowing some time for remote working means employees can handle some non-work related tasks and feel more accomplished throughout the day. Also, sometimes we all need to have a taste of working in our pajamas, right?

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It’ll be interesting to see how many traditional companies and industries start giving their employees more freedom with their work schedule. And how many end up rescinding their policies like Yahoo did.

What are your thoughts of the traditional 9-5 schedule and what are you doing to help foster your team’s productivity and creativity? Hit the comments and let us know.

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