Information for the city of Tampa
Service, retail, finance, insurance, shipping by air and sea, national defense, professional sports, tourism, and real estate all play a vital role in the area's economy. Hillsborough County alone has an estimated 740,000 employees, a figure which is projected to increase to 922,000 by 2015. Many corporations, such as large banks and telecommunications companies, maintain regional offices in Tampa. Tampa Convention Center, built at the site of Fort BrookeSeveral Fortune 1000 companies are headquartered in the metropolitan area, including .MacDill Air Force Base also remains a major employer as the parent installation for over 15,000 active uniformed military, Department of Defense (DoD) civil service and DoD contractor personnel in the Tampa Bay area. A significant majority of the civil service and contractor personnel are, in fact, themselves retired career military personnel. In addition to the 6th Air Mobility Wing, which is "host wing" for the base, MacDill is also home to Headquarters, United States Central Command (USCENTCOM), Headquarters, United States Special Operations Command (USSOCOM), the 927th Air Refueling Wing, Headquarters, United States Marine Forces Central Command (USMARCENT), Headquarters, United States Special Operations Command Central (USSOCCENT), and numerous other military activities of the active and reserve components of the armed forces.Downtown Tampa is undergoing significant development and redevelopment in line with a general national trend toward urban residential development.
The Tampa Downtown Partnership notes development proceeding on 20 residential, hotel, and mixed use projects as of April 2007. Many of the new downtown developments are nearing completion in the midst of a housing market slump, which has caused numerous projects to be delayed or revamped, and some of the 20 projects TDP lists have not broken ground and are being refinanced. Nonetheless several developments are nearing completion, which city leaders hope will make downtown into a 24 hour neighborhood instead of 9 to 5 business district. As it stands, Tampa residents face a decline in rent which has decreased an average of 2% next year. Nationally rent has decreased 4%. The Tampa Business Journal found Tampa to be the number two city for real estate investment in 2014.Tampa's port is now the seventh largest in the nation and Florida's largest tonnage port, handling nearly half of all seaborne commerce that passes through the state. Tampa currently ranks second in the state behind Miami in terms of cruise ship travel. T.MacDill Air Force BaseMain article: MacDill Air Force Base A KC 135R stationed at MacDill flying over Tampa Bay.MacDill Air Force Base, located in south Tampa, was constructed as MacDill Field just prior to World War II. During the 1950s and 1960s, it was a Strategic Air Command base for B 47 and B 52 bombers. In the 1960s, it transitioned to a Tactical Air Command installation for F 4 Phantom II fighters, followed by F 16s in the 1980s.
It is currently an Air Mobility Command installation, home to the 6th Air Mobility Wing, and includes both the 310th Airlift Squadron, flying the C 37, and the 91st Air Refueling Squadron, flying the KC 135. MacDill AFB is also home to the headquarters for two of the U.S. military's joint warfighting commands: Headquarters, United States Central Command (CENTCOM), and Headquarters, United States Special Operations Command (SOCOM). Both commands are independent from one another and each is commanded by a respective 4 star general or admiral.The MacDill AFB flight line was temporarily closed and the 56th Fighter Wing transferred to Luke AFB, Arizona following the 1991 round of base closings under the Base Realignment and Closure Commission (BRAC) discussions; at the time, the base was used for F 16 fighter training and operations and increasing level of civilian air traffic in the Tampa Bay area was considered detrimental to training.
The noise produced by the fighter aircraft was also considered inappropriate in a densely populated area. However, despite committee recommendations, the base remained open to house and support CENTCOM and SOCOM under the cognizance of the newly activated 6th Air Base Wing. With the disestablishment of Tactical Air Command a few months later, claimancy for MacDill passed to the newly created Air Combat Command.The MacDill flight line was initially reopened in 1992 to temporarily support F 16 aircraft from the 31st Fighter Wing and the Air Force Reserve's 482d Fighter Wing, following the destruction of their home station, Homestead AFB, Florida, in the wake of Hurricane Andrew. In 1993 the MacDill flightline was permanently reopened for NOAA WP 3D "hurricane hunter" operations, which had relocated from Miami International Airport.In 1996, the 91st Air Refueling Squadron moved to MacDill from Malmstrom Air Force Base, Montana, the 6th Air Base Wing was renamed the 6th Air Refueling Wing. It was renamed the 6th Air Mobility Wing after the 310th Airlift Squadron was activated on the base and the installation officially came under the Air Mobility Command.Approximately 14,000 people work at MacDill Air Force Base, with a significant number of military personnel and their families living on base in military housing, while remaining servicemembers and military families live off base in the Tampa Bay area.
MacDill AFB is a significant contributor to Tampa's economy and the city is very supportive of the military community. In 2001 and 2003, the Tampa Bay area was awarded the Abilene Trophy, which annually honors the most supportive Air Force city in Air Mobility Command.MacDill also hosts an annual air show that is enjoyed by thousands of spectators each year. However, there were no shows in 2002 and 2003 due to 9/11. The 2006 show was also canceled due to security concerns on base, but was reinstated in 2008. In 2008, pursuant to BRAC 2005, the Air Force Reserve Command's 927th Air Refueling Wing (927 ARW) relocated without aircraft or equipment from Selfridge Air National Guard Base, Michigan to MacDill AFB, where it became an "Associate" wing to the 6th Air Mobility Wing sharing the same KC 135R Stratotanker aircraft.Tampa is a city in and the county seat of Hillsborough County, Florida, United States located on the west coast of Florida on Tampa Bay, near the Gulf of Mexico. The city had a population of 346,037 in 2011.The current location of Tampa was once inhabited by indigenous peoples of the Safety Harbor culture, most notably the Tocobaga and the Pohoy, who lived along the shores of Tampa Bay. It was explored by Spanish explorers in the 16th century, resulting in brief and violent coicts with the native peoples and the introduction of European diseases, which wiped out the original native cultures over the next few decades. While Spain claimed Florida as part of New Spain, it did not found a colony in the Tampa area, and there were no permanent American or European settlements within today's city limits until after the United States had acquired Florida from Spain in 1819. In 1824, the United States Army established a frontier outpost called Fort Brooke at the mouth of the Hillsborough River, near the site of today's Tampa Convention Center.
The first civilian residents were pioneers who settled near the fort for protection from the nearby Seminole population, and the small village was first incorporated as "Tampa" in 1849. The town grew slowly until the 1880s, when railroad links, the discovery of phosphate, and the arrival of the cigar industry jump started its development, helping it to grow from a quiet village of less than 800 residents in 1880 to a bustling city of over 30,000 by the early 1900s.Today, Tampa is a part of the metropolitan area most commonly referred to as the Tampa Bay Area. For U.S. Census purposes, Tampa is part of the Tampa St. Petersburg Clearwater, Florida Metropolitan Statistical Area.
The four county area is composed of roughly 2.9 million residents, making it the second largest metropolitan statistical area (MSA) in the state, and the fourth largest in the Southeastern United States, behind Miami, Washington, D.C. and Atlanta. The Greater Tampa Bay area has over 4 million residents and generally includes the Tampa and Sarasota metro areas. The Tampa Bay Partnership and U.S. Census data showed an average annual growth of 2.47 percent, or a gain of approximately 97,000 residents per year. Between 2000 and 2006, the Greater Tampa Bay Market experienced a combined growth rate of 14.8 percent, growing from 3.4 million to 3.9 million and hitting the 4 million population mark on April 1, 2007. A 2012 estimate shows the Tampa Bay area population to have 4,310,524 people and a 2017 projection of 4,536,854 people. In 2008, Tampa was ranked as the 5th best outdoor city by Forbes.] A 2004 survey by the NYU newspaper Washington Square News ranked Tampa as a top city for "twenty somethings." Tampa also ranks as the fifth most popular American city, based on where people want to live, according to a 2009 Pew Research Center study. Tampa is now ranked as a "Gamma+" world city by Loughborough University.
Information for the state of Florida
In the twentieth century, tourism, industry, construction, international banking, biomedical and life sciences, healthcare research, simulation training, aerospace and defense, and commercial space travel have contributed to the state's economic development. The Gross Domestic Product (GDP) of Florida in 2010 was $748 billion. Its GDP is the fourth largest economy in the United States. In 2010, it became the fourth largest exporter of trade goods.The major contributors to the state's gross output in 2007 were general services, financial services, trade, transportation and public utilities, manufacturing and construction respectively.
In 2010 and 2011, the state budget was $70.5 billion, having reached a high of $73.8 billion in 2006and 2007. Chief Executive Magazine name Florida the third "Best State for Business" in 2011. Agriculture is the second largest industry in the state. Citrus fruit, especially oranges, are a major part of the economy, and Florida produces the majority of citrus fruit grown in the United States. In 2006, 67% of all citrus, 74% of oranges, 58% of tangerines, and 54% of grapefruit were grown in Florida. About 95% of commercial orange production in the state is destined for processing (mostly as orange juice, the official state beverage). Citrus canker continues to be an issue of concern. From 1997 to 2013, the growing of citrus trees has declined 25%, from 600,000 acres (240,000 ha) to 450,000 acres (180,000 ha). Tourism makes up the largest sector of the state economy. Warm weather and hundreds of miles of beaches attract about 60 million visitors to the state every year. Florida was the top destination state in 2011. 42% of poll respondents living in the Northeast United States said they planned on visiting Florida over spring break.
Amusement parks, especially in the Orlando area, make up a significant portion of tourism. The Walt Disney World Resort is the largest vacation resort in the world, consisting of four theme parks and more than 20 hotels in Lake Buena Vista, Florida; it, and Universal Orlando Resort, Busch Gardens, SeaWorld, and other major parks drive state tourism. Many beach towns are also popular tourist destinations, particularly in the winter months. 23.2 million tourists visited Florida beaches in 2000, spending $21.9 billion
We just collected the money that we were owed a lot more quickly.
Tampa Factoring Companies
Companies of all different sizes, including start ups, use factoring; and today factoring has become common business practice across many industries. -Tampa Factoring Companies
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Tampa Factoring Companies Articles
Effective Ways for Small Businesses to Avoid Cash Flow Problems
Without steady cash flow most businesses will fail to thrive, especially small businesses and start-ups. We've all heard the phrase "Cash Is King" and that's certainly true for established businesses, but for new businesses just getting started cash flow is even more important. Sadly, many new businesses fail to realize just how devastating cash flow problems can be to a business trying to establish themselves in the market. In fact, many businesses die a sad and lonely death simply because of bad cash management, and these are businesses that would otherwise have survived had they not experienced cash flow problems. Statistics show that 82% of businesses fail because they were unable to manage their cash. That's a tragic figure, especially when there are effective ways for new, small, and even large businesses to avoid these problems.
So, let's take a look at some important rules that small businesses should be aware of to ensure they never have to face liquidity.
No. 1: It's Cash That Sustains Business Growth
So many businesses don't consider cash flow an issue because they see the orders flooding in; however, many growing companies do experience cash flow problems. Increased sales generally mean increased costs to deliver orders; plus, in order to support the new volume of business other sections of a business typically need to grow. Your business may appear to be highly successful as orders continue coming in, but keep in mind that the faster your business grows the more financing it will need.
No. 2: Margins Are Just Accounting - They're Not Cash!
We know that accounting, and accountants, can be pretty creative with figures because there's nothing shareholders and board members love more than hearing about the industry-leading margins you're achieving; but your board members and shareholders are not the ones who have to find the money to meet payroll and pay your landlord. Margins don't pay your employees. Your sales may be booked down when your customer's order is delivered, but how long will it be before you receive payment? 30, 60, 90 days, or even longer? If your customers are not paying you and you're struggling to pay your expenses, your business is now in survival mode. Keep in mind that you may have great accounting margins but still have an empty bank account.
No. 3: When You're Selling B2B (Business-to-Business) Cash Flow Problems Will Likely Be Your First Issue
The more sales you make the more money you make, but when you're selling B2B it's not always that simple. Yes, you sell and deliver goods or services to another business and provide them with an invoice, and your customer will pay the invoice at a later date. But how much later? If you chase the business too hard for payment they'll probably never work with you again, so you could receive payment months later. You're not going to pass up businesses who buy with high volume, so you have no choice but to wait. So, you end up with a cash flow problem.
No. 4: Cash Flow Problems Can Occur Very Quickly
It doesn't take much for cash flow management to become a serious problem, so monitor your cash flow very carefully. Determine how much of your working capital is locked into receivables, inventories, raw materials, and so on; and know exactly how much money is required to meet both your sales targets and operating expenses. You may have made the sales but that doesn't mean you have the cash, and you may have paid for inventory but that doesn't mean it's automatically a cost of goods sold.
No. 5: Your Inventory Ties up Cash
You can't sell your goods until you've purchased or built them and, whether your goods are sold or not, your vendor still expects to be paid. This means that your inventory is locking up your cash. You could eventually make two times or even three times your money on your inventory, but margins do not equal cash.
No. 6: You Must Be Practical About Working Capital
Working capital is the figure left over when current liabilities are deducted from current assets, which means it's the money you have in your bank account available for meeting operating costs, paying vendors, and buying inventory - all the while waiting for your business customers to pay your invoices. Understanding and grasping the concept of working capital is a very necessary survival skill in business because being able to maintain sufficient cash to pay your own financial responsibilities whilst dealing with all the unknowns in business can be very tricky.
No. 7: Be Clear on What "Accounts Receivable" Actually Are
The money owed to you by your customers is called accounts receivable, which means the money that's sitting in your customer's bank account that belongs to you is called receivables. Just like inventory, the amount of money in your accounts receivable column is money you don't have. Certainly, you've done the deal and you've sent the invoice, but now you're waiting to be paid. You must remain very vigilant until such time as the invoice has been settled and the money is physically in your bank account.
8. Monitor the Health of Your Business Very Closely
Three aspects of your business that require close monitoring include -
-Inventory Turnover: Measure how long your inventory stays on your balance sheet without being converted to cash;
-Collection Days: Measure how long it takes to receive payment for services rendered or goods sold;
-Payment Days: Keep a record of how long you wait before paying suppliers.
Now, make a plan. Project these figures out to 12 or 18 months ahead then compare your plan to what actually occurs. This is a really great way of gaining some insight into your own business.
No. 9: Prepare for Financing before You Actually Need It
Don't wait until you need financing to start reaching out to finance companies. Contact companies who provide financing, especially credit line financing, and look for products where interest is not payable if the money is not used. Don't wait for your business to have cash flow issues. Waiting until you urgently need cash or a loan will subject you to higher interest rates and dodgy terms. Start the process while your business is healthy, which will allow you to negotiate finance terms from a position of strength. We strongly suggest you be proactive and find a partner ready to finance your business; a partner that's prepared to grow with you.
We just collected the money that we were owed a lot more quickly.
Tampa Factoring Companies Articles
Bookkeeping for Freight Brokers and the Most Common Mistakes Businesses Make
A freight broker is either a company or an individual who effects the transportation of goods by pairing up shippers with transportation services. The freight broker is not only responsible for pairing reliable and authorized transportation carriers with shippers, but also organizing the shipping needs for various organizations. Besides matching shippers with carriers, a freight broker is also responsible for ensuring each and every piece of cargo reaches its destination - and in good condition.
In addition to these tasks, freight brokers are also responsible for maintaining accurate bookkeeping records, and those who fail to keep meticulous accounting records are likely to lose money in the long run. In this post we've detailed what we believe are the most common accounting mistakes freight brokers make, and ways in which they can be avoided.No. 1: Attempting to DIY Your Bookkeeping Can Result in Costly Errors
Whether you handle the books yourself or delegate this vitally important job to an unqualified employee or even a family member, DIY bookkeeping is seldom, if ever, a good idea. Yes, initially you'll undoubtedly save some money, but your inexperienced bookkeeper's errors can ultimately become very costly to your business and result in expensive financing terms, increased bond premiums, and other unnecessary costs.
We strongly suggest you employ the services of an experienced bookkeeper who's qualified to deliver accurate accounting records, which will ultimately result in fewer errors and the job being completed quickly and efficiently.
No. 2: Postponing Important Bookkeeping Tasks Due to Heavy Workloads
It's not easy running a business, and anyone who finds themselves in this situation understands only too well just how difficult it can be to find the time to complete day-to-day time-consuming tasks. It's imperative that things like reconciling credit card and bank statements be completed each month because it's only through these reconciliations that errors can be found; plus of course it's how you determine out how much credit or cash you actually have.
As tempting as it may be to postpone these tedious tasks, you must ensure that your credit card and bank statements are reconciled every month, ideally as soon as you receive each statement. Keeping on top of statements means you can quickly identify any lost checks, missing deposits, or fraudulent charges, and be able to handle any discrepancies in a timely manner.
No. 3: Failing to Track Receivables and Invoices
Your business depends on you getting paid, and you won't be paid if you're not regularly and properly accounting for receivables. The lifeblood of your business is cash, which means the success of your business is entirely dependent upon you accounting for receivables. To put it another way, if the period of time between paying your carriers and receiving payment from customers is unnecessarily delayed by poor accounting practices, your business cash flow is going to be very strained.
If you're time-poor and realize you simply don't have time to track and collect invoices, then invoice factoring is the perfect solution for you. For just a small fee your applicable invoices will be purchased by the invoice factoring company, but the best part about invoice factoring is that you receive immediate payment! No longer will you have the time-consuming responsibility of trying to collect payments, thus saving an enormous amount of office time: plus, it leaves you free to take care of your own job, which is handling the day-to-day running of your business.
No. 4: Overlooking Liabilities Can Have Disastrous Results
When a surety inspects your business records to underwrite a bond, one of their first and most important considerations is whether your assets are sufficient to cover your liabilities. It's difficult for inexperienced bookkeepers to understand the full implications of accurate record keeping and sometimes DIY accountants record a liability but once the payment is made they forget to reverse the liability. This is a serious error because it understates net income while overstating liabilities, which makes your business appear less financially stable than it actually is.
The only way to avoid these unnecessary accounting errors is to hire an experienced bookkeeper. It's always handy to have another set of eyes, whether it be a CPA or an owner, to regularly review the balance sheet and check for discrepancies in account balances.
No. 5: Miscategorizing or Creating Unnecessary Expense Categories
All too often we see inexperienced bookkeepers either creating unnecessary expense categories or wrongly categorizing expenditures, either of which can be a huge red flag. Generally, each industry uses a standard set of categories for expenses and failing to follow this set of rules can signal to a surety or loan underwriter that an inexperienced person is handling your books; meaning that they may not be well prepared.
It's really important that your business's accounting software is correctly set up, preferably with the help of an accountant or experienced bookkeeper. Additional expense categories should not be added unless absolutely necessary. If you have any queries about how to classify expenses, don't hesitate to ask for guidance from your qualified accountant or CPA.
No. 6: Submitting Invoices with Insufficient Details
Don't try to save time by skimping on invoice details. Your customers' invoices should have detailed information on each line item; for example, do you invoice per mile, by weight, or by piece? Is the charge a flat fee? If there are additional charges such as fees or reimbursements for fuel, these should be listed as separate line items. The only way to avoid any confusion is to ensure that charges are properly detailed on invoices.
The last thing you want is for your customers to complain about charges they don't recognize on their invoices; and missing information can cause much confusion, resulting in delays in payment. All of these problems can be prevented by ensuring that your invoices have complete, detailed, and accurate information. Don't create unnecessary problems by trying to skimp on invoice details.
No. 7: Not Learning or Understanding the Full Functionality of Your Accounting Software
Getting a business up and running can be very expensive and time-consuming, and many freight brokers simply don't have time to learn how to use their accounting software package to its full capacity. This is not a problem if all your accounting and bookkeeping tasks are being outsourced; however, if you're using the software in any way at all, perhaps even just for entering checks and running reports, we strongly recommend that you learn how to use all functions of your accounting software package.
You can save so much time and have easy access to real-time information on the financial status of your business if you have the right accounting software and you know how to use it correctly. Having this information at your fingertips can help you make the right decisions to grow your business.
Tampa Factoring Companies Articles
How Medical Staffing Helps The Medical Industry
Mary Henderson sat in her office, waiting for the phone to ring. Her job was a busy one, and she had stopped all her calls and shut her door five minutes before the phone conference was set to begin just to get some time for herself. The truth was she was stressed to her breaking point. Her company Med Staff needed to hire three new people to cover the demand of their clients. The problem was, they couldn't. They were short on funds.
Med Staff did temporary medical staffing. They employed LPN's, RN's, and a few others of the same ilk. Companies that needed nursing for a short amount of time paid Med Staff, and the nurses were sent over on short term contracts. Then they came back, and they were sent somewhere else.
A retirement home had contacted Mary two weeks ago, they were undergoing an expansion, and they would need temporary staffing until they could appoint permanent nurses to the shifts. Mary had known she didn't have enough people for this, but she took the contract on anyways, figuring she could hire people. There were always a number of nurses and technicians applying for work at Med Staff, and she knew it wouldn't be a problem to hire a few new people.
There had been a problem though. There simply wasn't enough money in the books to do it. The company was doing fine, but a quick expansion, even as small as three people, simply wasn't going to happen, not without help.
She had gone to the bank for a loan, but they had denied her. It seemed to Mary that the only people who could get loan money from a bank were the people who didn't need to do so. And then she had found something different, a website online about factoring. She had looked the site over, and set up the conference call.
The phone rang, she picked it up. "Hello?"
"Hi, is this Mrs. Henderson?" a cheery woman's voice asked over the phone."
"Great! My name is Stacy, I'm going to help you today."
"Okay great." Mary said.
"I'm looking over the form you filled out, it looks like your company temporarily staffs medical professionals?"
"Yes," Mary said. "Nurses mostly."
"Great," Stacy said. "And if you called me, it means you ran into a snag."
"I took a contract to fill five places in an expanding retirement community. I have two people available but needed to hire three more. Unfortunately, we just don't have that kind of money in the books right now. We have a few outstanding invoices yet to be paid, but until they come in, there's nothing I can do."
"Do you know how factoring works?" Stacy asked.
"Not really," Mary admitted.
"Okay, well we don't look at your business credit, we look at your clients' credit. We know they have some time to pay bills, and we're interested to see if they can pay those bills. If they can, we become interested in helping you out, because we think all businesses should have a fair shot to make it, and sometimes things just don't work out."
"This is the first time it hasn't worked out," Mary said. "And it's hard."
"I know. I hear about it every day. The cool thing about my job is I get to help fix it. So what we do, if we feel secure in our ability to help you, is we buy a piece of your accounts receivable. We aren't just loaning you money, we're basically becoming active in your business. That is you get the money you need right now, but we have an assurance that we get our money back, later down the road."
Mary nodded behind her desk, even though the other woman couldn't see her. She had never heard of factoring before she came across the site on the internet, but the way Stacy explained it certainly made sense.
The call continued, with Mary giving the information that Stacy would need. She promised to get back to her within a couple of days, and then they hung up. Mary went on with her work, and a day and a half passed.
Mary was at her desk when he phone rang then. It was Stacy.
"Good news," she said as soon as Mary said hello. Mary couldn't help but smile as Stacy went on. "We're going to be able to help you out."
"You don't know how great it is to hear you say that," Mary said.
"Believe me, I do," Stacy said. "I get to say it more often than not, and I know that we're really helping good people, and good businesses."
"The bank, they couldn't do anything," Mary said, she felt salty tears stinging her eyes as they welled there.
"They aren't built to help people like we are. They just want as much money as they can get. We want money too, because it's a business, but if you don't succeed, we don't succeed, and it's also important to us that we help people."
"So what's next?" Mary asked.
"Well the real answer is I fax some stuff over for you to fill out and sign, but the fun answer is your business gets the help it needs, and you keep going to work each day. Well, not the weekends."
Mary couldn't help but laugh. "Believe me," she said. "I work plenty of weekends."
Stacy laughed as well, and then got the fax number she would need. Once again the women hung up and Mary let out a long breath as she sat back in her chair. She used a tissue to dab the tears from her eyes. She knew everything was going to be okay.
Tampa Factoring Companies Articles
Medical and Healthcare Invoice Factoring
Don't Wait to Be Reimbursed - You Can Receive Payment Today!
Anyone in the healthcare profession is painfully aware that third-party payers like Medicaid, Medicare, HMOs, Workers Compensation, and other private insurers, can take what appears to be an unnecessary long time to settle your accounts. But there's good news, because with 'factoring' there'll be no more long waiting periods to receive payment on your medical receivables. For anyone in the healthcare profession who provides any type of medical services, factoring is here to assist with cash-flow.
Is There a Difference between Medical Factoring and Healthcare Factoring?
There actually is a difference between these two types of factoring, even though we hear many people using these two phrases interchangeably. Basically, when there is no third-party payer involved, then healthcare factoring applies, and if a third-party payer is involved, then medical invoice factoring companies are used.
Healthcare and medical receivables factoring is available for the following services -
- Group and Sole Practitioners
- Physical Therapy and Rehabilitation Facilities
- Nursing Homes
- Durable Medical Equipment (DME)
- Medical Staffing Companies
- Medical Billing Services
- Medical Supply Companies
- Medical Coding Services
- Ambulance Providers
- Medical Transportation
- Medical Transcription Services
- Medical and Non-Medical Home Healthcare Providers
- Imaging Facilities Providing CT Scans, X-Rays, MRIs, and so on; and
- Many More!
Factoring for Healthcare Receivables
We typically associate healthcare receivables with customers who are not reliant on third-party payers. This includes sectors involved with medical staffing, medical supplies, medical transcription, medical coding and billing, and so on. Basically, it means that vendors who use healthcare factoring receive the benefits of an unlimited line-of-credit, all based on the services they provide.
You can see below that factoring healthcare receivables is a very simple process -
- As the healthcare vendor, you still invoice your customer for work you've completed. Some of the more common customers will include medical offices, nursing homes, hospitals, and so on.
- The next step is for the vendor to forward a copy of the invoice to the healthcare factoring company. Your factor will handle the collection of payment on your behalf.
- The factoring company will deposit an amount of money in the range of up to 85% of the gross value of the invoice into the vendors bank account within 24 hours, or less.
- The remaining (approximately) 15% will be held by the factor until such time as the account has been paid in full by the customer.
- Once the invoice has been paid in full by the customer, the factor will release the remaining 15%, less the agreed-upon fees, back to you, the vendor.
Factoring for Medical Receivables
Regardless of whether your business bills Medicaid, Medicare, Blue Cross/Blue Shield, a third-party insurance company, or HMOs, we have the perfect factoring solution for you.
The benefit to you of factoring your medical claims is that you'll receive upfront capital. It's the factor who will seek payment of your invoice.You can see below that factoring medical claims is a very simple process -
- As the provider, you'll continue submitting your claim to the third-party payer.
- At the same time, you'll submit a copy of the paperwork to your factoring company.
- The factoring company will deposit an amount of money in the range of up to 85% of the net collectable value into the vendors bank account within 24 hours, or less.
- Once the third-party payer pays your claim in full, the factor will release the remaining 15% (approximately), less the small agreed-upon factoring fee.
Tampa Factoring Companies Articles
Small Business Invoice Factoring: The Clever Choice!
Many small businesses are discovering invoice factoring and quickly realizing this was a very smart business choice! Why? Because small business invoice factoring converts receivables into immediate cash!
The Ideal Alternative to Traditional Bank Loans
Small businesses are discovering that invoice factoring is the perfect, and much easier, alternative to traditional funding sources, like bank loans and cash advances. Any small business who sells to the government or other companies can use invoice factoring to enjoy the many benefits of accessing immediate cash flow. Whether you've applied for traditional funding and been refused or applied and are still waiting to hear if you've been accepted, keep in mind that small business invoice factoring is a very viable option for you.
How Does Invoice Factoring Work for Small Businesses
One of the major benefits of small business invoice factoring is that it's the credit worthiness of your customers that determines the funding decision. This means that if you're a business who sells to the government or other businesses with good credit, you're the perfect candidate for small business invoice factoring.
Applying for invoice factoring is a very simple process, and you certainly won't be forced to wait weeks, even months, for a decision as you would with traditional funding sources.
Why Small Businesses Are Choosing Invoice Factoring
Many businesses are only just learning about invoice factoring, even though factoring has been around for a long time. Any business owner who has applied for a bank loan knows only too well that, to start with, the application process can take months, and secondly, there's still no guarantee you'll be approved for finance.
According to the Small Business Administration, in the first quarter of the year 2015 small business loan approval rates at banks were 22%, and at credit unions it was 43%. The limit on business credit cards is often capped at less than $100,000, which is often not sufficient to cover unexpected expenses or large projects.
Invoice Factoring: The Smart Alternative to Traditional Lending
Today, small business invoice factoring has become the smart alternative for many business owners because factoring provides an immediate cash advance, with no restrictions placed on the money received. It's also important to note that factoring is not a debt, which means there are no limitations on how you choose to use the funds received.
Yes, small businesses can access quick money with a merchant cash advance, but there's always a high cost involved. You'll soon discover that the cash advanced will cost your business more than 70% effective annual interest. Alternatively, cash advance lenders demand daily repayments with full payment due in just a few months. The demand for daily payback can destroy a small business, but sometimes business owners are left with no choice.
So, let's take a quick look at just some of the benefits of small business invoice factoring, and once you read through this list we're sure you'll think of more benefits to your own business.
With this immediate cash advance you'll be able to -
- Employee new staff members
- Easily meet payroll
- Accept larger orders from bigger customers
- Invest in marketing and sales
- Expand manufacturing and production
- Your business will be able to weather cash flow cycles and seasonal sales periods
- Pay down any existing debt
- Take advantage of early pay discounts from your suppliers (these discounts often cover your factoring fees)
- Extend your customers' payment terms
- Provide a smooth cash flow to support daily business operations
- Overheads are lowered due to reduced administration expenses
- Your business will be self-financed during rapid growth periods, without having to give up equity.
As you can see, the benefits of small business invoice factoring are many and varied, so why not contact us today and let's talk business!
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The benefits of using a Factoring company versus a bank loan
If you are looking for a convenient way to obtain business capital, factoring is one of the best options available out there. From a recent study, it has been identified that many people go for bank financing in such instances, considering that it is the least expensive method of investing. However, factoring is associated with many other advantages and we will let you know about them through this article.
A proper cash flow is something that every business in the present world should have. In addition, they need to speed up their cash flows along with time. Otherwise, it will not be possible for them to get banks for financing. Unfortunately, banks are not in a position to accommodate all the financial requirements of a company, due to tough credit standards. That is where factoring comes into play. It happens when a company sells its accounts receivable to a bank or a factoring company. The amount that can be taken depends on value of the invoice.
Key benefits associated with factoring
' A company can get large amounts of capital through factoring. It is because this method is entirely based upon accounts receivable. It has impressed many small scale businesses out there since they can obtain a bigger line from their accounts receivable for services or goods. They will not be able to get such a big amount of capital from any conventional bank lender out there. Factoring is something that is based on the credit strength of your potential customers. If your company has more potential customers with healthy credit strengths, you can easily enjoy the benefits of factoring.
' Factoring is quicker than traditional bank loans. Since most of the accounts receivable factoring lines are in a position to be set up, approved and actively funded within a matter of few weeks, you can go through a hassle free process. However, banks will take more time to engage with their credit reviewing activities about your company. They might even wait for audit results or fiscal period closes. Therefore, if you are in need of quick business capital, factoring is the number one option available out there to consider.
' Factoring is something that expands quickly along with the growth of your company. Almost all the factoring companies out there support it. Your company doesn't need to have an excellent track recording of business. You just need to select a factoring company that is big enough to accommodate all your business development ambitions.
' A factoring company does not offer loans to their clients. Therefore, you cannot find many similarities between a loan and factoring. A factoring company will purchase your accounts receivables along with cash. Therefore, it can be considered as a similar process to increasing the working capital, while showing it as a liability in the account balance sheets. This will even reduce debt in the balance sheet, when compared to borrowing. At the end of the day, your company will get the opportunity to enjoy a lower debt to equity ratio.
' Factoring is less expensive than equity. Most of the businesses approach equity investors to cater their financing requirements. However, there isn't any substitute for equity capital in some expansion purposes and business investments. Almost all the equity investors expect a higher return from the accounts receivable than the cost. When it comes to factoring arrangements, you won't be able to find any dilutive effect on shareholders. This will assist you a lot to stay away from hassle.
' Factoring is also recognized as one of the best options available to improve your turn. In the present world, many factoring companies will verify invoices with your customers and check whether they are being paid on time. This will motivate your customers to pay the invoices on time through a gentle reminder. This will result in a better service delivery from your end as well.
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trucking factoring companies
factoring companiesp> As the owner of your own business, you may be more than aware already of the difficulty in making sure that cash flow issues do not become a problem down the line. After all, the worst thing that can possibly happen for your business is to find yourself embroiled in a long and difficult situation that leaves you forever trying to find two pennies to rub together.
For any business in this situation, the problem can come for waiting for work to clear up and actually be paid into your account. Invoices, cheques and the like can take some time to actually processed which can leave you with short-term cash flow issues. Thankfully, there are options out there for businesses to look into - and one of these is factoring companies.
Factoring companies will, in exchange for your invoices, provide you with the cash today so that you don't need to worry about the waiting period that could make paying the bills and getting materials more difficult. With this type of setup, invoice factoring can become incredibly useful for many businesses who need to get out of a cash trap which they have found themselves in.
Because, depending on the size of the job, it can take up to 60 days for some businesses to get paid then it's important to cover your own back and not leave yourself short in that day. after all, how many businesses have two months revenue just lying there to cover all the losses until they get paid?
This is especially true of trucking companies. They tend to deal with lots of invoices which means a significant amount of running around and donkey work for the business owner themselves. Trying to get paid in time can become an incredible hassle and this is why you get specific trucking factoring companies who are happy to help out truckers specifically.
As we all know, trucking is an incredibly large industry with many companies out there employing hundreds of drivers. Unfortunately, many of these drivers can spend night in the cold or hungry as they are still waiting for work from six weeks ago to actually pay them. When this is the situation for a trucking company, turning to factoring companies for assistance might be the best choice left.
This means that a trucking company can pay the wages of the staff, keep all the vans topped up with fuel and continue to scale, grow and expand without always waiting for the never-never with money which is taking forever to arrive coming in. businesses running without a factoring model put in place are leaving themselves in significant risk, as competitors cash out fast and continue to expand.
There's genuinely nothing to be worried about when it comes to using a Factoring company - they aren't like a payday loan firm or somebody who is going to leave you with a huge pile of debt to apy back. Although you are technically borrowing a loan, so long as you only ever give them genuine invoices from work you have already finished you are merely speeding up the payment process.
In the United States, where trucking companies thrive, factoring companies are not considered borrowing in any capacity. This confidential agreement then allows both parties to profit and enjoy a comfortable future - it gives the factoring company a guaranteed asset of income to add to the list and it gives the trucking firm a wad of cash that they worked hard to earn.
The trucking company will usually need to pick up the invoice and cash it in still, and then make the payments back to the factoring company. Because it's a confidential agreement, and it can look bad for a business to be involved in this type of short-term finance even though it's perfectly legal and a very common practice, it's usually in the hands of the company to get the money for the factor.
This is an extremely old business type and has been used for many years by many different types of work - but none more so than truckers. While you may miss out on a small part of the money , something like 15% depending on who you work with, it means that you are getting the money today and can actually start putting some food on the table.
After all, an IOU or an invoice is not going to be you fed and washed, is it? For trucking companies when the money can be good one day and gone the next, it's up to the drivers to work sensibly and to ensure they are leaving themselves with a significant amount of time and finance to get through the week until they are paid again.
So the next time your trucking business is having some short-term cash flow issues and you are spending too much time chasing up slow paying clients, why not start considering to use factoring businesses as a way to change your motive and give yourself a more comfortable future in the eyes of your trucking staff and your bank balance?
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Payroll Funding: The Perfect Solution for Financing a Temp Staffing Agency
Many people run very profitable temp staffing agencies. Today's business environment lends itself very nicely to outsourcing employees instead of hiring them; thus providing staffing agencies with very attractive financial opportunities. But, like all other businesses, temp staffing agencies require working capital. In this industry, accessing capital can become a serious problem and many agencies struggle to meet their own financial obligations. In addition, business growth suffers because the agency is unable to add new clients. Fortunately, there is an answer to cash flow problems in temp staffing agencies.
Payroll: The Biggest Expense for Temp Staffing Agencies
Perhaps the most important expense, and often the biggest expense for a temp staffing agency, is employee payroll. It's vitally important that employees are paid regularly and on time. Failure to cover payroll will result in your employees leaving and seeking work elsewhere.
Of course, there are other financial obligations to be met by the temp staffing agency, such as paying employment taxes. Failure to meet tax obligations can become a costly and serious legal issue for agencies, with the result that businesses begin to struggle.
All Businesses Need Funds to Grow and Prosper
Most clients (both commercial and government) settle their invoices within 30, 60, and sometimes 90 days, and it's this lengthy period of time that creates financial issues for staffing agencies. Once a staffing agency has accepted a new client, it must be capable of covering the employee's wages for a period of up to 2 months - and this is before the agency itself starts being paid. So, in order to meet operating expenses, it becomes imperative that the staffing agency has a substantial cash reserve. And, the bigger the contracts the bigger reserve required. Without this reserve, the agency won't be able to accept new contracts, and without new contracts there can be no growth. What a vicious cycle! And it all comes down to cash flow.
Grow Your Temp Staffing Agency with Payroll Financing
Today there's an easy way to resolve cash flow problems experienced by so many businesses. It's called Payroll Funding, and it's a solution that's been designed specifically to assist staffing agencies access much-needed working capital.
What Is Payroll Financing?
Payroll financing is just one type of invoice factoring, and invoice factoring is a financing solution designed to help businesses finance their slow-paying receivables. With payroll financing your agency will receive immediate funds. No waiting 30, 60, or 90 days to receive payment from your government or commercial clients because you'll receive a payment from the factoring company within a day or two of receiving your invoice. Sounds too good to be true, doesn't it! Well, it is true, and it works very well for many businesses in many industries.
Factoring works because it provides the much-needed working capital required to cover payroll and other running expenses. Now you don't need to stress about slow paying clients; you can still meet your financial obligations and continue growing your business
How Factoring Works
Invoice factoring is a very straightforward process. Basically, your invoice will be financed in two payments. The first payment you receive will cover approximately 90% of the total value of your invoice, and your agency will receive this payment once you've submitted the invoice for financing. You'll receive the remaining payment, typically 10% less factoring fees, once your client has paid their account. It's important to note that your clients will still pay on their regular schedule; they're not being asked to pay any sooner.
Payroll Funding Is Available to Small Agencies Too!
Don't be concerned that your agency may be too small to be accepted for payroll funding. This is one of the great advantages of factoring; that it's available to businesses of all sizes, even start-ups. The reason for this is that factoring companies are more interested in the credit quality of your customers, because the factoring company is financing the invoices, which are the assets. When you apply for factoring, the factoring company will confirm whether (or not) your clients have good commercial credit, because this is what will determine if the factor is prepared to finance your invoices. So, if your temp staffing agency has reliable-paying customers, your business is an ideal candidate for payroll financing. You can see, therefore, that factoring becomes a very attractive financing option for agencies with a strong lineup of clients.
Grow Your Agency with Payroll Factoring
In case you're still not entirely clear about payroll factoring, let's have a look at a hypothetical example
Let's say you can't afford to grow your temp staffing agency because you're experiencing cash flow problems. A new client has just contacted you and requested 5 full-time employees for a 6-month period. This new client is a relatively large company with a good reputation. Unfortunately, though, you can't afford to carry the cost of this contract because they wait 50 days to pay their invoices.
The solution: You'll invoice this new client weekly and factor the invoice. By factoring the invoice you'll receive weekly cash advances, which means your agency can both service the new contract and continue paying your employees in a timely manner. Providing you're servicing reputable clients with no credit issues you'll be able to use receivables factoring to continue growing your agency. Besides resolving immediate cash flow problems, payroll factoring could be the catalyst for growing your business well in excess of its current capabilities.
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Bookkeeping Mistakes Commonly Made by Freight Brokers
It's true that freight brokers shoulder a lot of responsibility; from matching shippers and carriers, to ensuring that each and every piece of cargo arrives at its proper destination. Freight brokers also have the added responsibility of accurate bookkeeping, because failure to prioritize bookkeeping can result in the loss of money.
Below we've listed some common bookkeeping mistakes made by freight brokers, and how to avoid them-
Handling the Accounting In-House
Many business owners try to save money by handling the books themselves, or perhaps delegating this very important task to a family member or an inexperienced employee. Sure, you may save time and money initially, but errors can be costly: when you attempt DIY accounting you could well end up with more expensive financing terms, higher bond premiums, or a number of other unforeseen expenses. It's very important that you hire a competent bookkeeper because, not only will you save money, but you'll know that the job will be done accurately, quicker, and more efficiently.
We understand only too well that running any business is time-consuming and hard work, and many freight brokers are simply too busy doing their day-to-day tasks to focus on bookkeeping tasks, such as the monthly reconciliation of credit card accounts and bank accounts. It's through reconciling statements that you get a clear idea of how much credit or cash you actually have, and you can also pick up on any errors that may have occurred.
It can be so tempting to postpone this rather tedious task, but the truth is that your credit card statements and bank statements must be reconciled every month, preferably the moment each statement becomes available. In this way you'll be able to identify any potential problems in a timely manner; problems such as lost checks, missing deposits, fraudulent charges, and so on.
Failing to Track Invoices and Receivables
You're not going to get paid if you're using poor accounting practices with your accounts receivable. Let's face it, getting paid equals cash, and cash is the lifeblood of every business. An experienced freight broker understands that your cash flow can be strained by the delay between when you pay your carriers and when you receive payment from your customers. If you're finding that tracking and collecting invoices is taking too long, why not consider invoice factoring? An invoice factoring company will purchase your invoices for a small fee, with the bonus being that you get paid immediately, plus you're spared the time and expense of having to deal with collections.
Don't Forget Liabilities
One of the major considerations a surety has when looking at your business financials in order to underwrite a bond is whether you have sufficient assets to cover your liabilities. Many times we see an inexperienced bookkeeper recording a liability, but when the payment is made they forget to reverse the liability. This is a serious error because it results in liabilities being overstated and net income being understated, which makes your business appear to be less financially secure than it really is. These serious errors can be avoided by employing the services of an experienced bookkeeper. We also recommend that you have another set of eyes (which may be an owner or a CPA) regularly review the balance sheet to check for unusual account balances
Too Many Expense Categories
Another common error we often see with inexperienced bookkeepers is creating too many expense categories, or miscategorizing expenses. Generally, most industries and businesses have a standard set of expense categories, and when a loan underwriter or surety sees too many categories, or the miscategorizing of expenses, it stands out like a big red flag. It tells them that your books are not well prepared. Use an accountant or experienced bookkeeper to correctly set up your accounting software right from the beginning, and don't automatically add new expense categories unless careful consideration has been made. Remember to ask your accountant or CPA for advice, because they'll be able to guide you on how to classify expenses.
Incomplete Information on Invoices
It's very important that, when you invoice your customers, you provide sufficient detail on each line item. Do you invoice by weight, per piece, or per mile? Or is the charge a flat fee? If there are additional charges to invoice, such as reimbursements for fuel or fees, these should be listed as separate line items. In addition, these charges must be clearly and accurately detailed in order to avoid any confusion. When you send invoices to your customers that include clear and concise details, it prevents pushback from your clients. If there's missing information on your invoices and your customers are confused by unrecognizable charges, it could well cause a delay in payment, which is the very last thing business owners need.
Not Understanding the Functionality of Accounting Software
Many freight brokers purchase an accounting software package because they're anxious to get their business up and running, but they fail to learn how to use it correctly. This is probably not an issue if you're already outsourcing your accounting and bookkeeping tasks; but if you're using this software in any way at all, perhaps to enter checks and run reports, it's important that you spend some time learning how to use all the available functions. When used correctly, the right accounting software can save you a lot of time, in addition to providing real-time information on the state of your business. It's this information that helps you make important business decisions!
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Oil Well Cleaning Owner Interview
The oilfield services industry is certainly a booming one these days thanks to a renewed emphasis on searching and drilling for oil on private and state properties. One of the more profitable ventures in this field is not the drilling for oil, but the cleaning of oil and gas wells to keep them operating at full efficiency. Oil and gas drilling is a dirty business and wells will quickly become clogged even with regular maintenance.
Jeffrey Fielding is the owner of an oil well cleaning company who works with several drilling companies in providing cleaning and maintenance of oil wells. Over the past couple of years, Jeffrey has managed to grow his business considerably thanks in large part to his perseverance and determination. However, things were really tight when Jeffrey first started up his company and at one point he was faced with a dilemma that he didn't know how to overcome.
The following interview with Jeffrey tells how he managed to expand his company at a crucial time thanks to oilfield services factoring. If it wasn't for the presence of factoring companies that worked in his field, Jeffrey might be in a completely different business today.
"Hello, Jeffrey. It's good to talk with you and I'm glad you were able to spare the time to share your story with us."
Jeffrey Fielding: "Thanks, I'm glad to be here."
"Jeffrey, tell us a little about how you got into the oil well cleaning business first as it's something our listeners may not be fully aware of."
JF: "No problem, I'll start at the beginning. About ten years ago I joined an oil well crew as a roughneck, working my way up through the business. It was hard work and our crew was usually out in the middle of nowhere, but the money was good and the opportunities kept building for me. I quickly learned the job and was hired by a number of drillers to work their rigs over the next few years during the boom in the oil industry."
"Right from the beginning, I took notice the oil well cleaning crews that would work each rig and started talking to the guys who were a part of that business. After a few years it became clear to me that oil well cleaning was really where it was at 'cause the work was really steady and the money was just as good, if not better than what I was making. So, with the money I had saved up along with a couple of partners I opened up an oil well cleaning company of my own."
"It certainly sounds like you struck gold so to speak. So tell us how your business started."
JF: "It was pretty straightforward as we got our business loan, purchased the equipment and hired a couple of experienced people to help us clean oil wells. We had some pretty good connections and the orders started to pile in, but then we ran into a problem that none of us could even dream of happening. We became victims of our own success."
"I don't think I quite understand, could you explain just how that happened?"
JF: "Sure, about six months in we suddenly got new drillers who wanted to use our services, but we didn't have the money to expand. We get paid by invoice which can take up to 60 days to see the cash which meant that we trying to pay down our loan, the payroll and the equipment, fuel and other costs and didn't have enough cash on hand to expand. We knew that if we didn't hire new people and buy new equipment that we would miss out on a golden opportunity. However, one of my friends told me about oilfield services factoring companies that could help us out."
"What are factoring companies?"
JF: "Basically, a factoring company will buy the invoice and get us the cash immediately. We had good credit and our invoices were certainly good as well. By using their services, we were able to get the cash in our hands quickly and pay for new equipment to then expand our business efforts."
"It certainly sounds like the factoring companies saved the day for you, but just how do they work?"
JF: "Well, it was a pretty simple process. We just filled out a few forms with the information that they requested and then we sold the invoices we had already collected, but had not collected to the factoring company. We got the cash we needed immediately and they collected the invoice."
"It certainly sounds pretty straightforward, but why didn't you just get another loan?"
JF: "My partners and I went over that and another loan would just be too big a burden. We were already paying off our old loan which was considerable and didn't want to have more debt hanging over our company. By going with the oilfield factoring companies, we didn't owe anyone, anything. We just collected the money that we were owed a lot more quickly."
"So, how is business now?"
JF: "It's better than ever. By using a factoring company I was able to buy new tubing, cleaning fluids, a new vehicle and other equipment that let us take on the new orders. We were able to expand the business quite a bit and our reputation is such that we work with several drilling companies."
"It sounds like a dream come true."
JF: "It really does, but I don't know what we would have done if factoring companies didn't exist. We still use them when we need cash for new equipment or products to do our job. It's quick, safe and brings us the money we need to continue our business."Jeffrey's company really benefitted from using oilfield factoring companies that served his industry. There are factoring companies for other types of businesses as well that can take invoices and turn them into quick cash for businesses that need to expand. For Jeffrey and many other small business owners, factoring companies can make the difference in the success of your efforts.
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Discovering Trucking Factoring
Lambert Truck and Haul has been in business since the mid1980s. They've delivered goods for nearly every major industry in the nation and for 20 plus years, business was booming as they've traversed the country in all weather for all clients. During the heady times from 2002 to 2007, Lambert was a top rated accounts receivable mastermind of the trucking industry. Few customers were ever late on bills and those clients who were, were sure to turn in their late payments within a reasonable amount of time. Cash was flowing and times were good for all.
But a short year later, in the fall of 2008, when the United States economy took a nosedive and businesses both small and large began to feel the pinch on their pocketbooks, those that used to make their demands had suddenly and largely gone silent. Business slowed down. And worse yet, Lambert had noticed during the early part of 2008 that though the bulk of their clients were always on time with payments, the few late-bloomers there were, had seemingly started to spread this illness. And as spring turmed to summer and summer into the early days of fall, John Rondstadt, CEO of Lambert felt a chill go down his spine whenever he would look at the weekly A/R reports. The numbers of clients who owed him back debt were growing.
He had gone to his administrators and asked them what the problem had been. Were they doing something wrong or different when it came to reaching out to delinquent accouts? By his bookkeepers records, this wasn't the case. He thought perhaps that he was losing clients to a competitor who offered rock-bottom prices with little to no guarantee of quality performance and the folks who owed Lambert money had jumped ship and decided to leave him holding the bag. They couldn't afford to pay him their debt, but they could afford a lesser service, maybe. But after doing the cursory research for this and talking to friends in the field, he found that alas, no, customers of Lambert hadn't gone elsewhere. They had just gone home.
The situation looked dire to John Rondstadt. He had employees to pay, goods to ship, trucks to maintain and overhead that was almost unbearable when compared against the lack of funds that were coming in. At night he would speak to his wife Linda and shake his head in frustration. "I have a bad feeling, Lin," he would say with deep woe."Well, what do you think it is?" she would ask.
John would stare off for a moment and then close eyes. He could see the fleet of trucks he had purchased over the years. He could see them traveling, bringing goods to all of his clients. But somewhere, a haze would form over his fleet and the vast number of vehicles would disappear to but a few. What could cause this ultimate death spiral of business?
"I know what it is," John said. "I've relied too long on the profits I receive from invoices alone. I've let too many of our customers go too long without paying on their bills."Rhonda could only grab her husband's hand and look at him lovingly, "It's a hard economy. It might be awhile until things get settled up."John knew his wife meant well, but he knew that he was responsible for too many people to sit idly by, waiting for the sun to peak over the clouds.
The next day John strolled into his office and was determined to sit down and make every phone call to every client who had owed Lambert money. Now, it wasn't the most efficient way to spend a day as a chief executive, what he really needed to be doing was to be overseeing all of the other intricacies of shipment and delivery and reaching out to prospective clients or retraining his sales team to do the same. Even though he was doing something to help his company, he knew he had folks on salary to do just this thing. Wasting money, wasting time - even with the best of intentions, John knew that he was in trouble.
After a half day of contacting debtors in vain - they dodged his calls or promised to call back at worst or made minimal interest-only payments at best - he was about to throw in the towel when his secretary Beverley knocked at his door."John, can I have a word?" she asked standing in the doorway.
"Sure thing Bev, come on in." John leaned back in his chair and looked expectantly at Beverely. "Well, I did a little searching this afternoon and tried to figure out a way out of this mess John." She pulled a small stack of papers from a folder and set them on the desk before him. "Have you ever heard of factoring?" Beverley asked."It sounds vaguely familiar. What is it?" he said. "Well," she began, "Its actually quite simple really. So basically, factoring invoices would enable us to get paid on the nose for loads that we haul.""Immediately?" John interrupted.
"Yes, immediately," she continued, "In a nutshell, it's pretty easy. We can have an expert account manager review our numbers and help us complete a company profile. That profile will also include investigating our accounts receivable aging reports, our existing customer credit limits and so on. Additionally, the factoring will help to determine the creditworthiness of our customers independent of their credit history with our business. It's a broad view."
"I see," John said. "And then what?""Well, after their review, and we're approved for a factoring contract, we can negotiate terms and conditions. There's a lot of flexibility depending on the business volume and credit histories. This company tells us what the cost will be to purchase factoring for our accounts receivable. We come to an agreement and the funding starts pouring out."John leaned forward and reviewed the paperwork closely.
"It sounds too good to be true, Bev," he said. "Now, now, I know, I thought the same thing. But really, they have guaranteed us experts that do all the legwork, which would free us up here to focus on our clients in good standing and marketing, all that good stuff. And they're flexible John," she underlined a paragraph on the paper before him. "How flexible?" he asked. "They personalize the factoring rates so that the amount they are willing to take on is commensurate with our needs and our client's debt. It only takes 2 to 4 days for this to be figured out.
"That sounds pretty good, seeing as we tapped ourselves out with bank loans last year to repair the fleet and money sure is tight. We need to keep business rolling as normal and every day we're going unpaid, we're closer to facing some serious problems in both the short and long term," John said.
He took a deep breath and looked at his secretary with something she recognized as hope."Exactly". I think this might just be a way out of the trouble we're in with these folks who owe us money."John thought about this and agreed with Beverley. The clients who owed them money were long standing friends and professional resources of Lambert. They didn't want to throw away these relationships because they were having trouble paying their bills now. John knew that the economy had taken a hit and he knew that it would probably be a long time before things started to look up again. That unknown amount of time, if he handled these debtors incorrectly, could spell disaster for both of them. He didn't want to lose business but he also didn't want to lose any more money.
"Well, let me think about this tonight Bev, thank you." Bev nodded, stood up and left the office feeling that she had helped her employer keep on his shirt and hers too.John sat behind his desk and looked over the details Bev had not mentioned in their meeting. What other issues could freight factoring help Lambert with? With his pencil gliding down the sheet he noticed that the factoring company could help fray the cost of fuel with fuel discount cards and fuel advances. In fact, Lambert could receive up to fifty-percent cash advances upon load pick-ups. As a man who hated binding contracts with no room to breathe, he was pleased to see that this factoring company would not make him sign a long term contract, would not make him pay any sign up fees and there was no minimum volume required.
"Well, I'll have to tell Billy about this," John muttered to himself.His son-in-law Billy had liked the idea of Lambert so much and revered his father in law for having such business acumen that only two years before, he had gathered the venture capital to begin his own transportation service company. John knew then what struggles Billy would face but he encouraged him nonetheless. With the faltering economy, if a big fish like Lambert was hurting, a little guy like Billy was about to catch his death. But, an antidote may have been found in freight factoring and John was soon to find out. A few months later after going through the entire application process and having the experts review his accounts receivable, credit history and statements, John found himself beginning to dig his way out of the hole his delinquent account holders had created for him.
They took on reasonable factoring purchase contracts and stopped spending their precious man hours scrambling to collect debt. They took that time and refocused effort to offering competitive prices in new territories. John looked back on the dismal months of life before freight factoring and almost shuddered at the thought. Had he missed the boat on this one, he probably wouldn't be in business today.
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