One of the quickest way to a business to improve cash flow is through the use of accounts receivables factoring. Just what is factoring and how does it work?

Factoring is defined as the “selling of an interest in your receivables or invoices to a factor at a small discount in return for immediate cash.” The factor, referred to as the company that purchases the invoices, will charge a small percentage as a fee to collect the invoices and advance the money. In most cases, there are no upfront processing fees or application charges whatsoever.

The history of factoring goes back to quite a long way into history. Factoring’s origins go back thousands of years, to the Mesopotamians. It was also a vital source of financing for American colonists who would ship furs, lumber and tobacco to England. Subsequently, one of factoring’s biggest users was the U.S. garment industry, where the time between procuring cloth to be made into a suit, say, and being paid for the final product could be many months.

Often times, businesses will choose to factor only a portion of their invoices, choosing to collect on their own invoices during cash surpluses and factor their receivables during tight months. By working with an experienced company, businesses reduce the risk of customers being confused as to the payment process.

In some industries, factoring may be regarded as a less worthy financing option, such as bank loans. In fact, it is sometimes a more advantageous type of financing, based on the specific needs of the business.

“As a subcontractor for custom doors on construction jobs, we’d have to wait 30 to 60 days for our money,” says a satisfied customer. Now we can get our money right away and keep our cash working for our business.

Brian Little is an Business Finance Consultant with Bedrock Financial Group, LLC. providing financing solutions to small and medium sized businesses nationwide. He publishes “Business Focus”, a monthly on-line newsletter and writes for his blog “Thoughts on Business and Life.”

Accounting is the vital part in any size of business. Since accounting is a tedious and time consuming job but it is very important that accounting is outsourced to offshore company. This decision helps the company to concentrate in their area of specialization and not worry about the accounting aspect of the business. Outsourcing has several advantages and these include the following:

• The services of experts are available at a fraction of what would have been paid to hire them on a full time or part-time basis.
• An offshore accounting outsourcing service provider provides reliable and competent services that are an asset to the company and simplify its working.
• Outsourcing relieves the company of the tedious and yet crucial process of accounting bookkeeping.
• When a company considers outsourcing not only does it not bother with recruitment of accounting professionals but also saves on office space and related expenditure.

Certain Tips

1. The total cost is always a factor in the company while off shoring a job. But the lowest bidder need not always be the best bet because accountancy job is a big risky job. So you should be careful while selecting a company.

2. Don’t feel shy to ask query to the vendor if your have any doubts. Also do ask them whether they have done any similar project or not. Its better to ask them for sample example.

3. Milestone should be created for the free flow of the project to completion. This not only save time for both the party but helps to make the payment in installations as and when completed.

4. Accounting is a very tough job. So this must be done from certified public accountants and in case of offshore outsourcing you need to confirm that the accountants are qualified to handle and provide accounting solutions. So check the offshore vendor is dependable or not. Don’t believe them blindly.

5. Start with a small project so that you can give the vendor a chance to prove their caliber.

6. Security issue must be discussed upfront to get clear about it. Accounting information is crucial to the success of every business and any leak of such information can have drastic consequences.

7. Clear your expectation from the vendor otherwise it creat problem. It is really a vital thing to specify your needs and expectation.

8. Communication with the accounting outsourcing firm is of utmost importance and you should be able to interact and communicate freely. Thus the service provider ought to have communication facilities that are satisfactory and should be easily contacted.

9. Reviewing previous projects that the vendor has done will give you a fair idea of the level and quality of accounting that they can deliver. So that you can judge their line of thinking and working. It is also recommended that you initially start with a pilot project that will assure you of the services that you have been promised.

10. A contract must be made before start of any project which clearly deals with your expectations, accuracy of work and deadline to complete the work. This contract must contain all information from major to minor details so that you don’t face any problem.

Accounting outsourcing is always ideal in any size of business.

The author is cofounder of Cybelink, a company specializes in small business financial and accounting outsourcing like Bookkeeping, Tax, Accounts Payable, Accounts Receivable, etc. For more info visit www.cybelink.com

One of the most critical accounting activities for a business is accounts receivable (AR). Ironically for a small business that operates with limited capital, AR becomes very important to remain competitive. In today’s credit linked business environment, it is very relevant & efficiency can be much better harnessed and at a much lower cost. With the offshore service provider taking care of this aspect, the small business has more time and flexibility to attend to other core business areas like procuring orders, improving service delivery and mobilizing resources. Accounts receivable outsourcing is thus a trend among small business today.

Advantages of Accounts Receivable Outsourcing
Recovering past due accounts without spending more in staffing and training is one of the greatest challenges for a small business. Most often, companies write off this receivable amount as loss because the cost to train and hire a qualified in-house staff to manage them outweighs the cost of collecting the debt. This predicament for small business is now set to come to an end. By outsourcing accounts receivable, small business can avail a less expensive - and often higher quality solution and achieve significantly higher collection efficiency, thereby improving liquidity and company bottom lines.

By accounts receivable outsourcing, companies gain access to top notch collection agency professionals and advanced collection agency resources even if they don’t have full time AR management needs. It doesn’t take a long roster of past due clients to make a big dent in a company’s bottom line. According to statistics, once an account becomes 90 days overdue, your business is likely to receive only 73 cents for every dollar owed. After 6 months, the amount drops to 50 cents on every dollar and down to 25 cents after one year. Bringing a collection agency on to handle accounts receivable addresses delinquent accounts within the first 90 days, before they get out of hand.

How Accounts Receivables Matter
Sales that have not yet been collected as cash reflect Accounts Receivable. In today’s credit based business environment, small businesses sell their merchandise or services in exchange for a customer’s promise to pay at a certain time in the future. Timely collection of accounts receivables is an extremely important source of cash inflows. If this management is bad, small business may not have sufficient liquidity to meet its own expenses. Moreover, accounts receivable portfolios can amount to 21 percent to 34 percent of a small business company’s assets. Inefficient collection can amount to 25% of the asset base of a small business could put the very existence of the business at stake.

For a small business, like any other enterprise, accounts receivable also represent an investment. The money locked up in accounts receivable is not available for meeting the costs of running or expanding the business. The return from an investment in accounts receivable doesn’t occur until the customers clear their invoices.

Day-to-day management of accounts receivables is traditionally paper intensive, time consuming and expensive. Invoices, payments, purchase orders, and statements are often received via mail, fax, or email. It is always not feasible for small business operators to implement Enterprise Resource Planning (ERP) and Line of Business (LOB) applications for data management because of high investment cost. Even if they manage the cost, capturing information from hardcopy documents, routing them to concerned individuals, and providing easy access to the documents in a timely fashion is indeed a very complex task for small business involving deployment of skilled manpower and enabling systems. Ultimately, management and collection costs of accounts receivables far outweigh the collection putting the small businesses in financial jeopardy.

Efficient Accounts Receivable management is thus a key task for a small business enterprise.

AR Outsourcing - Small Business Advantage
Small business operates with less manpower and do not have the ability to deploy highly expensive credit recovery mechanisms in their own country. Again, no-credit business is absolutely unthinkable in today’s perspective. Just by outsourcing small business accounts receivable to an offshore destination like India where there is an abundance of technically competent and skilled manpower at labor costs in the range of almost one-tenth of the rates in USA, small business can leverage best resources to attend a critical business domain that is very much relevant to its sustainability and viability.

Partnering with an accounts receivable outsourcing firm has many benefits. These benefits include, but are not limited to, increased cash flow; reduced operating costs; better small business accounts receivable control; efficient management of small business balance sheet accounts, increased sales to slow paying accounts; fewer delinquencies resulting in lower collection costs; and improved customer service. According to IDC review, outsourcing business processes from US is expected grow with a compound annual growth rate of 7.1 percent through 2009, when the market is expected to reach $355 billion. Of the total spending on account of outsourcing, small and medium businesses would have a share of 29% by 2009.

The progress of small business accounts receivable outsourcing can be fairly mapped on the company’s Daily Sales Outstanding (DSO) figures and reduction in bad debt. Number of outstanding invoices drops sharply, the impact being felt more in case of very old outstanding invoices as somebody in the offshore destination handling the accounts receivable portfolio is consistently following the invoices on a day-to-day basis. Due to increased fluidity and availability of time for concentrating on more core activities, small business witness significant growth and their overall turnover improve noticeably. On the whole, this better functioning and cash flow consistently improves their bottom lines. Offshore companies deploy cutting-edge technology to carry out their accounts receivable functions without any investment impact on the outsourcing company. This technology integration adds speed and efficiency and improves customer service for the outsourcing small business. Prompt and efficient follow-up reduces delinquency, thereby offshore companies work with many customers on accounts receivable processes and they are an excellent resource on best practices across companies that can be accessed by small business companies to improve their business efficiency and generate higher returns.

Accounts receivable outsourcing for small business is a trend that has come to stay. By leveraging dedicated and skilled manpower backed with high-end cross cutting technology, small business units can drastically turnaround locked cash to instant liquidity at a minimum process cost and utilize the resource to accelerate growth and higher returns.

The author is cofounder of Cybelink, a company specializes in small business financial and accounting outsourcing like Bookkeeping, Tax, Accounts Payable, Accounts Receivable, etc. For more info visit www.cybelink.com

Everyday a new business, partnership or company is formed to carry out trading transaction in view to profit from the business activities. By the time any person register the business, partnership or company, documentation is required for every single step. The recording or tracking for these documents is both time and effort consuming. These records are essential and important, so it should not be overlooked.

Many a times, the owner need to plan and action on driving revenue for the business. The last thing the owner wants to bother about is recording every transaction himself. At this stage the owner needs an accounting professional who may keep track of every financial event. Nothing remains same forever thus the business will also expand and demand more efficiency and accuracy. Hiring a full time headcount in the beginning period of the business will burden the business with high manpower cost. A sound option is to outsource the portfolio to a professional on freelance or part time basis, who cost cheaper than an accounting firm.

Freelance accounting professional understands the requirement and importance of accuracy for every business and is committed to offer its clients the best and most cost effective accounting services. Cost of accounting professionals is the biggest thing that may beleaguer any business owner. These highly qualified accounting experts command a high remuneration that often goes out of budget. Excluding this cost you can also avoid expenses like medical fees, insurance, yearend bonus, etc, associate with a full time headcount.

Bookkeeping is that section of any business, which includes the most tedious tasks. Though keeping records of economic events is monotonous job but indispensable for growth of business. A clever financial insight is all about how you make maximum utilization of available resources in a productive direction. Financial records are useful for business growth planning and so as to declaring the correct profit for tax liability.

With the help of a freelance book keeper, business owner get a way to perfectly maintain their important information without banging their head on tallying and correcting the entries. Outsourcing bookkeeping function gives business owner the flexibility to set their own priorities and manage time for what matters the most for the growth of business.

Christopher is an freelance accounting service provider.
To find out more on the services,
Click Here for a non-obligation discussion and a free evaluation of your accounting needs
==> http://www.AccountsEasy.com

Having an application for a merchant account rejected by your local bank can be a soul-destroying experience, especially if you have expended a great deal of time and effort on your application, and when your business operations are already in a high-risk sector, such as adult entertainment, travel services, online pharmacy, escort services, dating, telemarketing, high-volume or multilevel marketing.

If this happens to you, your next step depends on a number of independent factors, but whatever the specifics of your situation, it still undoubtedly useful to understand the reasons why your application has been rejected, both so that you can better deal with the set-back, and so that you are better informed and equipped to move on with your business.

Bank rules for accepting or rejecting account applications are numerous and complex, and several minor mistakes or inappropriate answers can easily mount up to rejection. It may be that you have only done a few small and easily righted things wrong, so it pays to examine just what your mistakes may have been. The basic types of mistake are outlined below.
Lack of documentation

It may be that you have failed to submit all the necessary documentation for your application to be successfully processed. Banks can require a vast number of documents to accompany any application, as well as complicated application forms requiring a great deal of information about the merchant, including details of the merchant’s legal name, their DBA (Doing business as) name, their URL, and their contact details including email, address and telephone number. The most standard requirements for accompanying documentation include driving license, passport, proof of incorporation or business license, monthly processing statements, and monthly bank statements. If your company already has an online presence, then this entails further paperwork, including a BBB (Better Business Bureau) report for your DBA, Legal Name and URL, printed yahoo.com search results for your DBA, Legal Name, and URL, a printed list of your domains from whois.webhosting.info, as well as print-outs from your website showing product descriptions and merchant policy.

Failure to supply any of the above documents may result in your application being denied, although it does depend on your specific situation. For banks, the lack of complete documentation can be taken as a sign of your company’s inability to follow straightforward rules.
Better business bureau complaint record

For 80 years, the BBB has served as a consumer watchdog, handling disputes between consumers and merchants, and reporting its findings to the public. An independent non-profit organization, the BBB attempts to resolve disputes concerning consumer dissatisfaction with service provision, delayed refunds, non-payment of bills, overdue accounts, and other consumer worries, without recourse to the courts. They count among their members the vast majority of businesses dealing with the general public.

If a consumer complains to the BBB about your company, then you will be notified and informed of the details. At this point you should do whatever you can to rectify the problem, as failure to do so will undoubtedly cause difficulties for your business in the future, and records of unresolved disputes may well provoke banks to refuse your account application. The BBB is a neutral organization, and ensures that both consumer and merchant rights are respected when seeking a resolution to problems.
Record of Rip-offs

In this context, the term “rip-off” refers to overcharging for goods or services presented at a lower price. In other words, the customer agrees to purchase and receives the product they have requested, but the provider then charges them at a higher rate than was advertised. Evidence that you have been a victim of rip-offs is likely to damage banks’ confidence in your ability to manage your business adequately. It is therefore always worth double checking prices and receipts, particularly for expensive items or services.
Misrepresentation

When you submit your application for a merchant account, the bank will thoroughly check that all the information you have provided is true and accurate. This entails contacting the main credit rating agencies (Experian, TransUnion, and Equifax), checking your record with the BBB, and possibly contacting your business partners to ensure you are telling the truth about the location and nature of your business. This may also entail contacting your landlord to check that you really do occupy the space you have claimed. They will also compare your claimed processing volumes with your monthly statements to check that they tally. In other words, banks go to great lengths to verify that the information you have supplied is genuine and accurate. For this reason, you, too, will have to make considerable efforts to ensure that you are telling the whole truth in your application.
Moving on

If you can establish with some certainty which of the mistakes listed above was the reason for your merchant account application being rejected, you will be better prepared to assess your next move. Hopefully, you will be able to learn from your errors, so that you will have more success in the future, whether it be with a new application to a different bank, opting to work through a merchant account provider, or trying to set up an offshore merchant account. If you can rectify your mistakes, all these options are still open for you.

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I am going to make an assumption that you are a small business person, or want to be. I I will do my best to convince you to use Quickbooks as an integral part of your accounting system. Though I am not employed by Intuit (the maker of Quickbooks); I do believe that it is the best choice for 99% of small businesses.

Fair warning: I take a different approach than most accountants who you have read.

Reason #1: You need to be tracking your income and expenses anyway, and Quickbooks gives you an easy way to do it.

Most accounting professionals will start off justifying this by saying that you need to track your income and expenses for tax purposes, and if you don’t, you’ll get into deep trouble.

While understandable, this kind of thinking gets people off on the wrong foot. While technically true, it’s a misguided approach. Why are you in business anyway: to support the various levels of government? I didn’t think so. It is a much better approach to understand that you need to keep good accounting records for you, to have a clearer understanding of where your money is coming from and where it’s going.

If your accounting system is set up to optimize the information you need, doing tax reporting is not that difficult.

Reason #2: Quickbooks is simple to use.

Why is this important? Tools that are easy to use actually do get used. The Quickbooks people understand that real people are using their software, and make it a snap to record your business transactions.

Consider as well that although you are the primary or only user of your Quickbooks installation at present, this may change as your business expands, and you may hire someone to take care of your books. Wouldn’t you rather flatten out the learning curve for someone learning your accounting system?

Reason #3: Quickbooks is inexpensive.

Now the fact that Quickbooks is not very expensive shouldn’t be the only factor, or even the most important factor, in choosing it. However, the reality is that due to it’s low price, it’s not something that most businesses will need to put off buying.

Most likely, you can afford to go out and buy it today. I bought my copy of Quickbooks Pro 2007 for $100 with a coupon. Even without the coupon, it was only $150. So, it’s not a huge investment.

Reason #4: Quickbooks is ubiquitous.

Quickbooks is everywhere! What that means is your accountant or bookkeeper will likely be familiar with it, and customized templates and add-ons (in the event you need them, which you probably don’t) are easier to find than with other, less popular software.

There are also numerous online user groups available to answer your questions. Some of these groups are very active, with many knowledgable professionals participating.

In addition, if you hire someone to take care of data entry, as mentioned earlier in this article, you are likely to find someone already familiar with Quickbooks.

Reason #5: Quickbooks is compatible with many other software applications and online services.

You will probably be able to download transactions from your bank, although there are arguments for and against this practice and you need to decide what is best for you. Quickbooks also integrates with many other software packages such as inventory systems. This feature will minimize the need to double-enter data.

I have covered some of the major reasons that you should consider using Quickbooks in your small business. I believe it is the best choice for most small businesses’ accounting system.

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In NYC there are several companies and vendors that work towards providing a comprehensive solution to companies that are in need of having their accounting and bookkeeping work handled by a third party. Often it happens that a person sets up a business and then finds out that it is not possible on his part to maintain the financial aspect of the business as he is not well versed with all the nuances connected to that. This becomes all the more difficult if the business that one is operating is mid sized or a large scaled one and you have to make sure that you hire the right people to do your work. Bookkeeping is one of the most important aspects of any business and it is crucial for you to keep a proper track of all the financial dealing of the business to know exactly how you are faring in the business.

Bookkeeping NYC services are provided by several vendors that are operating in New York City. What you have to do for your business is find out one vendor that will do your work efficiently so that you can have all the things arranged in a proper order. Most business organizations know and realize that bookkeeping is one of the most important aspects of their business, but often they end up neglecting this. So if you have not yet thought seriously about arranging your financial records properly, you must do this immediately. A little bit of background study on the accountant and bookkeeper that you hire for your work will ensure that you do not face any problems while handing over the work to the third party. In fact when you outsource the work of bookkeeping NYC you can end up earning profits as well.

You must understand that finance and accounts are something that only a professional can deal with. You may feel that buying one of those accounting and bookkeeping software can help you out in this, but if a person does not have the basic knowledge about accounting there is no way that they can work with the software. It is all together a different scenario if you are running a small scale business you will not have any problems for this. You are running the business and you know exactly what financial transactions are taking place and this is very easy to manage and handle. Every thing in this business is done at a very basic level and that is why it becomes easy to handle all this things efficiently.

The tax paying season is the one time when bookkeeping NYC professionals become very busy as they have to put in proper order all the numbers that is required for calculating the taxes. To avoid last minute rush and delays it is very important for you to have the things in the proper order and calculate your taxes accurately. Bookkeeping NYC officials are highly trained and they know how to calculate the taxes for all industries.

Peter Terry has extensive knowledge about bookkeeping and knows the importance of this for running a successful business.To know more about Accounting firm NYC,NYC bookkeepers, Bookkeepers New York and Bookkeeping NYC visit http://www.nycbookkeepers.com

There are 5 factors in which the accounting professional will take into consideration in determining the fee.

The complexity of the business depends on the nature of the business. It will determine the amount of time and effort to record the business transaction. It will layout the guidelines as:-

- how transactions are to be recorded,

- how to calculate cost and the appropriate allocation

Service based and product based business are two common business nature.

Service based business sell services. It is difficult to associate the cost of providing the services. In general, most small service based business would do away with ascertaining the cost of service provided. They would take the revenues generated from the services and less all deductible expenses to attain their net income. This nature type requires lesser time and effort compare to product based business.

Product based business sell products through various channels. It can be single product or multiple products. Stock inventory management is preferred for this business type. Itemized costing will be tedious and time consuming. More setup works and tracking are required. However, it can capture the cost of sale accurately thereby presenting a fair and true view report of the business.

The support from the business operator themselves can lighten the workload of the book keeper. The operators can help the book keeper to prepare some documents / data for the transaction records. This summarized information will cut down the time and effort on the recording.

The frequency of the report very much depends on the business operators. The book keeper will charge a higher fee if the reporting is more frequent. A yearly reporting will cost much lesser to a monthly reporting requirement.

The detail of the report would be a factor only if the business operators require additional information from the book keeper. The book keeper will furnish the business operators with a standard industry set of reports. If an additional report is requested, it may subject to adjustment in fee charge.

The support from the accounting professional would be the extra services other than the book keeping service. It could be filling out a survey requested by statutory board, assistance to obtain credit line from banker, etc.

The best way to save and pay less tax is to pay the correct tax. It is recommended to properly record the business transaction and report the correct earning. Outsourcing the book keeping function is a definite solution to business with limited or no resources to perform the duties.

Christopher is an freelance accounting service provider.
To find out more on the services,
Click Here for a non-obligation discussion and a free evaluation of your accounting needs
==> http://www.AccountsEasy.com

Early in the year, the Inland Revenue Authority of Singapore (IRAS) laid their hands on the tax evaders. Those got questioned, investigated have to pay the authority the tax shortfall due to under declaring income. To add icing to the cake, they are ordered to pay huge fine as a penalty.

Among those got caught admitted outright that they reported their “estimated” income as they find it difficult to keep proper records. The tax authority checked and agreed that they are not genuine tax evaders but “they had not been keeping proper records.”

The above incidents prove that, with the support from the tax authority, it is important to keep business transaction record. Not doing so may result in substantial repercussion.

Small business setup, particularly those “One man management” and those with a couple of staffs doing sales and logistic duties, are the group in concerned. They are ranked along with the hawkers, taxi drivers, etc, as most likely not reporting their accurate and exact income.

These business operators usually focus on the operation of the business instead of keeping the records. They claim to know the profitability of their business “by the heart” and declined to rely on the books record. “Too busy”, “I do not know how”, “It is difficult to keep proper records” are the common reasons given. However, these reasoning will not be accepted in the court of law and the business operators must bear the consequences at the end of the day.

How can the problem be resolve?

An option is to outsource the recording function to a third party individual. An accounting professional is equipped with the adequate knowledge to maintain the book keeping records for small business as well as for sole proprietors.

An accounting firm would also be engaged to provide the required services. However, the fee charged by the accounting firm is generally higher as to the fee charged by an accounting professional.