| Cash is the lifeblood of any business.
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| | while it reduces the wait time for
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| As humans need air to breath and food to
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| | receiving payment, it also reduces the
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| eat, your business requires customers
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| | time for the bank to clear the payment if
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| that provides the primary substance that
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| | it is drawn on a non-location bank.5.
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| keeps a business in business: cash.But in
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| | Consider Accounts Receivable Financing
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| the real world, businesses that invoice
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| | Factoring: The process is simple: when
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| their customers for payment can face a
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| | a company sells a currently due invoice
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| challenge in getting paid, especially
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| | from a credit-worthy business customer to
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| when the customer may be another business
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| | a third party (The Factor) in exchange
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| or a government agency. Somehow the
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| | for getting that money today. The factor
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| terms "NET 15, NET 30 or DUE UPON
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| | advances a certain percentage of the
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| RECEIPT" seem to go unnoticed by the
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| | total amount of the invoice and holds a
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| customer and the invoice doesn't get paid
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| | percentage in reserve. When the customer
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| until 60 to 90 days after the work has
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| | pays the invoice, the factor releases the
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| been performed. In other cases, the
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| | reserve, less the agreed upon fee
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| invoice may be paid after 120 days - if
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| | (discount rate). With factoring, your
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| not paid at all. For the seller, this
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| | company's credit is not evaluated -- your
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| can be the start of cash-flow challenges,
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| | customer's credit is. Factoring can be
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| which can rapidly escalate into a
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| | used as temporary or alternative
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| crisis.In spending over 10 years working
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| | financing for many businesses.
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| to help turn around financially troubled
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| | Traditionally, manufacturing companies
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| businesses, I have found that the key to
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| | used this form of financing but today
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| better cash-flow is to ensure that the
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| | factoring is available to many other
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| business implements a system to get their
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| | companies ranging from construction,
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| receivables paid quicker and faster, with
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| | import/export, distribution -- even
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| less pain for the customer.Here are eight
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| | companies that provide services to
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| ways to start improving a company's
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| | government entities.6. Consider Purchase
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| cash-flow today:1. Give a Discount for
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| | Order Funding: If your businesses
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| Paying the Invoice Before the Due Date:
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| | provides services to other companies that
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| Offer an additional percentage off or
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| | require purchase orders, you can secure
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| maybe a fixed dollar amount off of the
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| | short term funding to be used to finance
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| total invoice if they pay within 5 days
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| | the purchase or manufacture of specific
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| of the invoice date. This strategy works
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| | goods that have been pre-sold by you to
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| well because it provides a win-win
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| | your credit-worthy customer. This type of
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| situation for you and your customer. If
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| | funding entails issuing letters of credit
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| they pay before the due date, they will
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| | or providing funds that allow clients to
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| save some additional money and you will
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| | secure the inventory they need to fulfill
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| be paid a lot faster. If they do not
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| | customer orders. This frees up existing
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| take advantage of your generous offer,
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| | cash that your business has on-hand for
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| they will be responsible for the balance
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| | other use.7. Have a Referral System:
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| owned. It also helps keep good customers
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| | Word of mouth marketing is the most
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| because you have provided an incentive
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| | powerful and cost-effective way for a
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| for them to continue to do business with
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| | business to acquire new clients. People
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| you.2. Have an Internal Collections
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| | like to do business with those they like
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| System In Place: More often than not, a
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| | and trust; the same is true for
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| small business will focus so much on
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| | businesses. You need to have a referral
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| acquiring the client and performing the
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| | system in place with your existing
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| work that it doesn't dedicate as much
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| | customers, business partners and even
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| time and effort to collect payment. Make
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| | your employees to help them to refer you
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| sure you send your invoices out
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| | business. A great book that will show
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| immediately upon completion of your work
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| | you how to develop a word-of-mouth based
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| or shipping of your product. If you have
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| | marketing and referral system about this
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| the resources, have your staff send a
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| | is The World's Best Known Marketing
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| friendly email reminder or make a phone
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| | Secret by Ivan Misner, Ph.D., who is
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| call ten days before the due date (if
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| | also the CEO and Founder of BNI
|
| it's a Net 30 or more term) to the
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| | (Business Network Int'l) , the world's
|
| customer reminding them to make
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| | largest business networking and referral
|
| payment.3. Accept Credit Cards: One of
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| | organization.8. Create a Rewards Program:
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| the simplest ways to increase cash-flow
| |
| | Almost every major business - from
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| is to accept credit cards. Once the
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| | supermarkets to office supply stores to
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| charges are made, the money is
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| | credit cards- has a rewards program. Some
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| transferred to your account, usually by
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| | offers discounts to its customers in the
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| the end of the business day, or in some
| |
| | form of a credit towards a future
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| cases, instantly. Studies have shown
| |
| | purchase, or special product incentives
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| that people and businesses will spend
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| | (i.e. buy one get one free) or in some
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| more using a credit card than they will
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| | cases even cash-back. You can create
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| with cash. Offer your customers the
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| | your own rewards program as a way to
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| ability to pay their invoices via credit
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| | retain and reward customers who pay their
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| card and your sales will increase.
| |
| | bills on time or ahead of time. The cost
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| Because there are thousands of credit
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| | is minimal to your company and results in
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| card processors in the United States, you
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| | future, higher value purchases with an
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| are in a position to compare and
| |
| | increased frequency, and customer
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| negotiate processing rates and equipment
| |
| | loyalty. You can also implement a
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| rental fees.4. Accept Checks By Phone,
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| | rewards program as part of your referral
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| Fax and the Web: This is a very easy way
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| | system.By implementing some or all of
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| to have your customers pay, with little
| |
| | these strategies, you can help ensure
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| hassle. There is inexpensive commercial
| |
| | that the cash keeps flowing and your
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| software available for purchase which
| |
| | business remains a viable entity.© 2005,
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| will allow you to create a check from
| |
| | Timothy M. Houston. All Rights
|
| your printer, based upon a check that
| |
| | Reserved.Timothy M. Houston is the
|
| your customer faxed to you, or gave to
| |
| | President of Houston & Associates, a
|
| you over the phone. Also, there are
| |
| | commercial debt management and business
|
| online services available which will
| |
| | consulting firm based in Staten Island,
|
| allow your client to "write" a check over
| |
| | New York with affiliated offices in
|
| the internet, email it to you and then
| |
| | Texas, California and Florida, (
|
| you can print it and deposit it to your
| |
| | In 2005, Tim launched ( which is
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| bank account. This is especially a great
| |
| | dedicated to helping small businesses to
|
| tool to use to improve cash-flow because
| |
| | stay in business.
|
