By Gregory Bridges
If your business is facing cash flow challenges, account receivables factoring may be the ideal solution to the problem. With receivables factoring, you sell your accounts receivable or invoices to generate quick cash. Receivables factoring is a common practice that’s been used for centuries by businesses around the world to manage cash flow. In fact, receivables factoring transactions in the United States, alone, exceed $60 billion per year, according to the Commercial Finance Association.
Benefits of Receivables Factoring
There are a number of benefits to receivables factoring. A major reason is that it gives you the ability to immediately access cash owed to your company. For some businesses, this minimizes the need to incur debt for operations while waiting for invoices to be paid.
Another advantage of factoring is that it provides a smoother, more consistent cash flow. Instead of wondering if or when you will receive payment from your customers, you can accurately predict when you’ll receive payment based on the terms of your relationship with the receivables factoring company. Businesses typically must wait 30, 60, or even 90 days to receive payment on invoices for products or services that have been delivered. During this time, these funds are tied up and inaccessible to the business. However, receivables factoring can eliminate long billing cycles and enhance cash flow.
Also, factoring eliminates the need for you to handle your own collections. Factoring companies are run by professionals who specialize in collecting and tracking invoices. This translates into an overall reduction in the amount of bad debts and fewer headaches for your business.
Receivables factoring can give you access to cash within 24 hours, which can help you effectively meet short-term cash flow crunches. It also can help you:
Accelerate cash flow, making it easier to make payroll, pay taxes and fulfill new orders.
Offer better terms to large customers and increase sales.
Extend credit to large customers without asking for COD.
Pay your suppliers faster; take advantage of early pay discounts.
Purchase equipment, inventory and supplies.
Qualification for Receivables Factoring
Just about every type of industry that generates commercial invoices can and does use receivables factoring. In general, if you pay for labor or materials prior to receiving payment from your customers, factoring can help your business. Or if your business is growing faster than you can generate additional working capital-from private sources or from a bank-factoring can probably provide the cash you need for steady growth. Also, if you have a fairly new business that can’t qualify for bank financing, factoring may be ideal for you.
To qualify for receivables factoring, your company will have to meet to two basic conditions. There can be no existing primary liens on your invoices, meaning no other company should have a claim on the payments when they come in. Also, your customers must also be creditworthy. The factoring company will evaluate your customers on the basis of how quickly they’re likely to pay their invoices.
Prime Candidates for Receivables Factoring
Is your business a prime candidate for receivables factoring? Receivables factoring may be the perfect solution if:
Long billing cycles are putting a strain on your business cash flow.
You’re spending too much time collecting from slow paying customers and not enough time building your business?
The bank has denied your request for a traditional loan because of your lack of years in business, profitability, assets or overall financial strength.
Your business could increase sales by offering better terms to your new and larger customers.
On the other hand, receivables factoring may not be a good fit if your business is running on low margins-less than 10 percent. Receivables factoring also won’t make sense for your business if you have ample working capital and cash flow isn’t a problem.
How It Works
With receivables factoring, you essentially liquidate or sell outstanding invoices to a factoring company to receive immediate working capital. The company buys the invoice from you for a cash advance amount slightly less than face value, and then later collects the full amount when the receivable is due. Once the factoring company receives full payment for the invoice, you’ll receive the remaining amount-minus a fee. Generally, the receivables factoring fee amounts to three to five percent of the invoice value.
Factoring companies have different fee structures, but factoring fees typically involve:
Advanced funding - When you send in an invoice to be factored, you’ll usually receive 70 to 90 percent funding of the invoice amount within 24 hours after the invoice has been verified. Then the advanced funding is wired to your business bank account.
Discount rate or factoring fee - The factoring fee can range between 2.5 percent and 3.5 percent per 30 days, or .1 percent for every day the invoice is unpaid after factoring. (Factoring fees can be customized to the individual needs of your business and customer base.)
Remainder of the advance minus the factoring fee - When your customer pays the invoice, you will receive the remainder of the advanced funding, minus the factoring fee or discount rate.
Here’s an example of how receivables factoring works. Suppose you have a customer XYZ Company, which owes your business $100,000 for a shipment of your gadgets that were just delivered. XYZ Company is a large customer that has good credit, but they never pay their suppliers (you) any sooner than 45 days. Instead of waiting 45 days to receive payment for your $100,000, you decide to take advantage of receivables factoring. The factoring company verifies your invoice to XYZ Company and you receive 80 percent of the $100,000 ($80,000) within 24 hours, wired to your bank account.
If you have a discount rate similar to the one previously given and XYZ Company pays the $100,000 invoice in about 45 days, this equals a factoring fee of 4.5 percent of the original $100,000 ($4,500). Since you have already received an advance of $80,000 from the factor, you’ll receive the remaining $20,000 minus the factoring fee of $4,500 ($15,500). Ultimately, you’ll collect $95,500 of the original $100,000 invoice.
Keep in mind that the percentage charged by a receivables factoring company is generally more than you would pay for a short-term commercial loan. For that reason, factoring is best used to generate quick cash-not as a long-term solution. Also, receivables factoring companies make their money based on the volume of invoices they purchase. So you may have a slightly harder time finding a factoring company if you have invoices less than $10,000.
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Tips on Event Registration
By Gregory Bridges
In working with more than 1000 clients, we’ve seen some really great ways to enhance event registration. And the best thing is that with the advent of online registration systems, much of these techniques can be automated and streamlined.
The result: a better experience for your registrants. In addition, these online registration systems eliminate many of the headaches you and your team face on a day-to-day basis.
These 10 little success secrets will:
* Attract more registrants
* Make events more valuable
* Result in more satisfied attendees
* Make your life as a meeting planner easier
1. Take the time up-front
You might be surprised how simple changes in your registration design can make everything much easier and more efficient for you and for your attendees - which makes everybody happy! Plus, preparation up-front will save you a lot of time and hassle in the end. Online registration systems are event registration tools to help you build your event quickly. But, all too often, building the event takes longer than anticipated because not enough time was spent designing the registration process.
Give yourself a week or more to create a great design for your online registration. That way you can percolate some really good ideas, bounce them off of others, and even get some assistance from your online registration system’s support team. Some support teams will help you scope everything out, brainstorm on ideas, and even help you build your registration pages.
2. Maximize registration time
Give yourself plenty of time to register and round up registrants. The more time you have to register people before an event, the more registrants you’ll have. We see so many events where registration starts a couple weeks before the event. By increasing the registration period, people perceive the event as being bigger, more important, and have a sense that it’s even more worthwhile for them.
This also enables you to have tiered pricing, such as early bird specials that motivate people to sign up even earlier. Some online registration systems will automatically turn different pricing tiers on and off based on dates that you set.
3. Make Signing Up Easy
Give your prospective attendees as many opportunities as possible to say “yes” to your event. How many times have you come across an event you’ve wanted to attend… only to have to sort through web pages to try to find the small “register here” text link hidden at the bottom of a page. This means lost registrants and revenue. It also means more staff time in directing people to where to go. Display the link prominently on your home page, in the navigation bar, certainly on every page that discusses the event, at the bottom of emails (in the signature), and include the URL on your printed materials.
4. Help them feel at home
With most online registration services, your attendees click from your site to your registration provider’s site. This has the potential to be confusing to your attendees and may make them uncomfortable sharing their contact and credit card information. You can avoid this by changing the border, headings, and font colors on the registration pages to match your site. Also, upload your logo into the custom header and/or footer pages. Now when people click to register, they feel all warm and fuzzy about your brand and colors being right there with them.
5. Welcome them in
A “welcome” message is such a nice touch that tells people exactly what event they are registering for and make them feel good. It’s a wonderful opportunity to remind your prospects of the value they’ll get out of attending your event. Be specific. Whether it’s a conference, incentive trip, training, or golf tournament, we all need reassurance on why we are investing our time and money. It is also a good place to explain a little bit about the online registration process (especially if there’s a lot to decide on or fill out)
For example:
Welcome to the Conference on Happy Golden Retrievers. We are so excited that you will be joining us in Lake Tahoe this August 20th-23rd.
Among the 300 happy goldens, all the cool dog tricks they’ll do, and all the fun we’ll have hanging out with each other, it ought to be dog-gone-fun! In the next four registration pages we will ask you some questions about you and your dog, your preferences for meals, your hotel preferences, and your preferred method of payment.
Please feel free to call or email if you have any questions or problems along the way. We want to make sure you are as happy as your golden.
6. Give access to detail
One reason people abandon their registration is because they want to learn more before buying. Having links from the registration pages to more detailed pages (either on the registration form or to your website) is very important. It enables the registrant to open secondary windows, get more information, and then come back to finish their registration. You may want to encourage people to call you while they are registering, so they can get answers right away and finish their registration right then and there.
7. Ask Deeper Questions
Ask your registrants more questions than their contact information, meal preferences, and credit card numbers. Learn more about them; their expectations for the event, their views and experience on topics related to the event, and their demographic data. Your registrants will feel the event will be more tailored to meet their needs. You can actually use the information to make the event more relevant.
Some example questions are:
* What would you like to get out of this event?
* How did you learn about the event?
* Why did you decide to attend?
* How many times have you been to this event?
* Have you recommended it to others? Why?
* What would you do to improve the event?
* Which part(s) of the event are you most looking forward to?
You could use this information to improve the event, promote it, track marketing efforts, gather aggregate data to share with all attendees, and pump up aspects that people are really looking forward to. Some online registration systems will enable you to add custom questions like these to your registration pages. They may also output the responses into a nice, neat format for you as well.
8. Fulfill their desire to buy
Give your registrants the opportunity to buy more than just an event registration. Your registrants are already in the buying mood. They may be itching to get something to help them before, during, or after your event. Do you have books, t-shirts, tapes, white papers, or autographed copies of books from the speakers at your event? Or if you are a charity, this might be a great opportunity to ask for a donation. With an online registration system, you can offer your registrants additional value (with very little additional effort) as they are going through the registration process.
9. Thank your registrants
With online registration, the system automatically sends out confirmation emails to the registrant. Use this opportunity to help your registrant feel really good about their decision to attend. Write a confirmation email that sincerely thanks them, gets them even more excited about their decision to attend, and gives them a subtle reminder to tell their friends and colleagues. You may even want to put a special offer in the confirmation that would help their friends get a deal on your event.
10. Add value before the event
Most online registration systems have options for automated reminder emails at time frames that you determine. Use this capability to increase your attendance, develop more rapport, and increase referrals.
The super charging trick is to give additional value in these emails… a tasting of a topic that will be covered at the event, an article from one of the speakers, an industry whitepaper, or hard-hitting controversial questions facing the industry.
Maybe just before the golf tournament, it’s a blurb from Tiger Woods on how to putt. Give something that would add value and color to your registrants’ lives… anything that would cause them to feel like the event organizers have obviously done their homework and, therefore, the event is going to be super valuable, too.
Bonus Tips:
After reading these 10 tips, you may be asking, “Is there anything else I should know?” We decided to throw in a few bonus tips to help further enhance the event and registration experience.
1. Recruit testers to break your registration
Fully test your registration pages before going live with them. It is much easier to spend the time up front than to have the hassles and embarrassment of a misaligned registration form.
Sometime you can just be too close to it and need another set of eyes to do an adequate job of testing. The more testing you do, the smoother everything will go. Rehearse the registration while it is still in testing mode with several people in your organization. Ask the tech support advisors of your online registration provider to test it for you. Their expertise in event setup will ensure you’re getting the most out of the application.
2. Bring back the people who abandon
Some systems are able to automatically email people who came to register and never finished. The email would ask if they had any questions or problems. This gives you an opportunity to be proactive in helping people complete their registrations, thereby increasing your registration numbers. On some systems, this may be a report that you can run yourself and then email to manually.
3. Talk to attendees after the event
Post-event follow up is so often overlooked. You can stand above the crowd by doing a post-event follow-up email and/or survey. Thank your attendees, ask them what they liked about the event, and what they thought could be done better. Some online registration systems can automate that process too. For example, set the system to automatically send out personalized emails with a survey link one week after the event is over.
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Why You Should Outsource Your Website Design
By Gregory Bridges
Understanding Outsourcing
Outsourcing is the delegation of tasks or jobs from internal production to an external entity. At present standards, it has become more related to hiring the services of staff overseas where salaries are markedly low as compared to the local existing standards. It is primarily done by companies to save money, improve quality or free company resources for more important activities.
Low-cost countries such as China, India and Venezuela continue to attract companies to move things offshore and outside their own boundaries. However, outsourcing should not only be seen as a cost-cutting maneuver but also as a way to produce important strategic benefits. One thing that is slowly being recognized is that there are savings to be gained in sourcing knowledge and talent as there are cost savings in sourcing things.
The sourcing of knowledge and technology provides access to better processes or efficiencies as well as more efficient management procedures. Outsourcing opens the way to make use of specific specializations of entities that would otherwise not be available. More and more companies are starting to realize that the probability for attaining excellence is much higher if it concentrates its efforts on its core activities. Other tasks such as building of websites are better left to professionals. The good thing about the present status of building of websites is that the service can also be outsourced to offshore companies. A company can now have the benefit of a much bigger and better site for the same amount of money spent in the US for a regular site.
The forerunners of outsourcing have exhibited much competitiveness in terms of well-developed telecommunication and IT infrastructure, good business services and having a pool of qualified people. This is the very reason for the so-called India advantage. India ranks first among the most favored outsourcing destinations due to its varied inherent strengths. It has a booming IT industry which is recognized all over the world. It has the largest English speaking population after the USA and has excellent training infrastructure. India’s government is also very supportive of outsourcing activities. Not to be forgotten of course is its cost-effective manpower which caught the initial attention of companies seeking ways to reduce costs.
Outsourcing should not be construed as abdicating responsibility but rather as leveraging outside capabilities. When organizations outsource, they do so because they would want to leverage the distinct skills and resources of other organizations to the benefit of their company and their customers. The basic business philosophy underlying outsourcing is the delegation of business activities that isn’t of core competence. It is about accepting the fact that no single company can be particularly good at everything. It is about using this known fact to assess a company’s strengths and weaknesses. Once a company is clear about what it considers essential, then it will be able to focus on broader business issues while having operational details assumed by external experts. Outsourcing has long ceased to be a strategy used during bad times only as in cutting operational costs. It has also become a business strategy used during good times to focus on the company’s growth.
Building of Websites
Outsourcing has introduced teleservices to numerous organizations worldwide. It can be broadly referred to as information-based work performed at a distance from the customers. Its market can be divided into three categories namely tele-processing, software export and interactive teleservices.
The first category covers tele-processing which includes all back-office functions performed in remote information processing factories. Specific tasks such as data conversion services, remote technical staff and content management are performed by an outsourcing company. Content management would in turn include content services for websites, database maintenance and refresh, various design services and even animation. The second category includes website development and related e-business applications development while the last category provides technical support to owners of PCs and peripherals.
Website development requires a special touch that only experts in this field would know. It is not just about producing a website but ensuring proper full scale websites that incorporates web design and placement, Internet marketing and optimization to gain the right listing on search engines. A web services firm specializes in the planning, design and development of web based business-to-business sites.
Optimal website placement is crucial to the success of any website. Web services firms are expected to provide a complete, professional design that is based on a client’s specific business environment. The design and layout of text, logo and graphics is as important as the ease of navigation. Special attention is given to color, white space, type fonts, background elements and other related items as these make up the artistic elements of a website. The aim is to create a website that projects a professional image, while at the same time, pleasing to the eye. The design should also be search-engine friendly and scalable for future add-ons.
The high-quality content of websites is the leading reason for repeat visitors followed by ease of use, quickness in downloading requested information and frequent updating. One area of a corporate work load that is best outsourced is website management and maintenance handled by web professionals. A company stands to reduce costs by eliminating the need to maintain a full time website specialist, web developer, artists, designers and network administrators.
There are a lot of choices when it comes to website development providers. The important thing to consider is how well they would be able to respond to each company’s unique specifications. A company will do well with the services of a provider that guarantees proper maintenance and updating of a website for the least possible costs. Most website development firms offer affordable hourly and retainer agreement based contracts and plans.
A company may wonder what logic lies behind outsourcing the building of websites to low wage countries. Offshore outsourcing firms located in developing countries have a wide range of world-class website development services to offer at affordable prices. Generally, they are always interested in building mutually-beneficial partnerships with overseas companies. India has opened the way as it revealed its most important natural resource which is the abundance of technically skilled manpower. Cost-effective services are provided without compromising the quality. Other developing countries are making their presence felt in the industry. Common sense tells us that any company stands to gain more if it is able to access the same quality of services and products for a considerably reduced cost.
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