Monthly Archives: October 2010

Accounts Reveivable Factoring Resolves Cash Flow for the IRS

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If you are a small business owner, you might hire people as independent contractors versus as employees, and there are rules to help you determine how to classify these folks which affects how much you pay in taxes. This might include, for example, whether you need to withhold from your workers paychecks in addition to the tax documents which you may need to file. An employers who misclassifies workers as independent contractors can end up with substantial tax bills, just like they can face penalties for failing to pay employment taxes and for failing to file required tax forms.

Business owners should know about hiring people as independent contractors versus hiring them as employees. But basically, the IRS uses several different characteristics to determine the relationship between workers and businesses including:

1) Behavioral control covers facts that show whether the business has a right to direct or control how the work is done; 2) financial control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker’s job; and 3) the type of relationship relates to how the workers and the business owner perceive their relationships.

If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees. If you can direct or control only the result of the work done — and not the means and methods of accomplishing the result — then your workers are probably independent contractors.

Regardless, there are many factors with a small business that can make it easier if you have paid contractors. One is cash flow. For example, some businesses use tactics like accounts receivable factoring to make sure they have the funds each month to cover payroll to employees. While others use contractors, and need to employ invoice factoring to cover tax debts at the end of each quarter.

More information is available on the IRS website or by calling the IRS at 800-829-3676 (800-TAX-FORM).

An Expert on Keeping Good Financial Records

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Author Kate Lister, a former banker, says if your goal is to qualify for a bank or SBA loan one of the most important things you can do is to have a good financial management system in place. She notes that the banker is the last person you want to uncover a flaw in business operations, so regular financial reports plus checks and balances by an experienced accountant couold prevent mistakes and the consequential doom.? 

Keeping a good financial management system won’t guarantee success with a lender, especially in today’s economic times, but the lack of one means certain failure.

As a factoring company, the Interface Financial Group (IFG) has heard stories like this often, and in fact, invoice factoring can help businesses stay on track with payroll, or paying their bills on time when funds do not come in as expected.

Kate Lister is a former banker, small-business investor and veteran entrepreneur. Her books and websites include Finding Money: The Small Business Guide to Financing and Undress For Success: The Naked Truth About Making Money at Home.

Money Saving Business Start Up Tips

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Today you need not open an office for many buisineses. Just set aside one private room in your home, and you’ll be doing business. Employees can work from home as well, and you will saved a ton of money on office overhead. There are conference call in companies and webinar services for inernal or external meetings. All you need to pay for is a webcam and microphone if offsite employees do not have them, etc. And what’s more, if you don’t have alot of cash yet in your new business, you can always rely on a factoring company.

The Interface Financial Group is North America’s largest alternative funding source for small business, providing short-term financial resources including spot factoring (invoice discounting). The company serves clients in more than 30 industries in the United States, Canada, Singapore, Australia and New Zealand, and offers cross-border transaction facilities between the U.S. and Canada. The IFG organization operates on a local level with business experience and expertise in numerous diverse areas including accounting, finance, law, marketing and banking.

A factoring company like IFG can be invaluable to any start-up business. Because IFG offers clients a use it as you need it funding option, each invoice purchase is a separate transaction and does not form part of a portfolio lending approach. The transaction is modeled as a buy-sell transaction. IFG first undertakes a due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices to IFG for purchase. Upon receipt of invoices, IFG checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed.

Service Business Start-ups Profit from Accounts Receivable Factoring

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If you are an entrepreneur looking for a new business startup idea, just know that the business you start today may not be the one you actually run tomorrow. Sometimes an initial attempt to start a business does not work, and the profits are just not there. And what some entrepreneurs experience is that a new profit-making venture happens because of contacts or knowledge learned with their first business.

Out of all the various types of businesses, whether wholesale, retail, manufacturing or a service businesses — service businesses do offer some advantages as a start-up. Service businesses are usually localized, so you may not have to compete with as many national companies as in a retail, wholesale, or manufacturing business. A service business also requires less capital, plus you won’t need to finance a large inventory. Customers can usually be asked to pay immediately upon completion of the work when you are in a service business.

However, in today’s economic times sometimes they do not pay right away. And if you have a start up service business, you can take advantage of accounts receivable factoring so you can get cash today – or in 24 to 48 hours – for invoices that will pay in 30, 60 or 90 days later. Look for a reputable factoring company like IFG online, and get started. Factoring funds is a sure fired method of making sure your new service business stays in business so you can grow.

Small Business Financial Tips: Tax Write Offs Include Your Office

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Home based businesses are on the rise today in this depressed economy. If you have a small business, and work out of your home, here is a list of some of the ?tax write offs you should know about. Tax laws are setup to help start-up businesses, so just make sure you know what you are entitled to be getting from the IRS!

A home office should be a room; a room where your office equipment is located, with only one entrance and one exit, where you are able to shut a door.

The deduction is accepted when you take the square footage of the office, and divide it by the square footage of your ebtire house to give you a percentage, such as 25 percent. Then you could take 25 percent off of the mortgage , or renbt if you are a renter, plus you can take it off the home owners insurance, electric, gas, water, and garbage collection.

And if you are having issues this year coming up with your IRS payment for taxes, just think about using invoice factoring This tactics has been around for 4,000 years. ? Invoice factoring allows you to collect the funds, minus a percetage to the factor, for outstanding invoices. Money that is owed to you and has bot yet been paid.

Accounts Receivable Factoring for Disaster Relief

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And so the U.S. Small Business Administration is sending out a notice reminding homeowners, renters, businesses and non-profit organizations located in Illinois of the deadline to submit disaster loan applications for physical damages from the severe storms and flooding that occurred on July 19 through Aug. 7, 2010.

Why? Because the deadline to file an application for physical damage is Oct. 18. The SBA encourages those affected by the disaster to return their completed applications, even if they have not settled with their insurance company. Waiting to file a SBA application could cause unnecessary delays in receiving disaster assistance.

The reality is that many businesses could not wait for this, so they had to figure out a way to get additional income fast survived. Accounts Receivable factoring is one solution. The good news is that in the future, anyone can use factoring services – crisis or no crisis – to get paid from outstanding invoices within less than 48 hours.