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Business Is a Science Supported by Art

June 07, 2012 | Comments: 0 | Views: 170

Business is a science supported by art. Successful businesses understand the balance between top line and bottom line. Remember during the "dot com" boom, companies were going public by showing revenues with no profit. Revenues that went on the top line (to show the venture capitalists), but were immediately owed to the vendors actually providing the product or service the website offered. With few exceptions, the days of lose money for businesses is pretty much over. The days of "we only lose $.50 cents on each order but we make it up in volume" are behind us!

One of those exceptions is factoring. Factoring (also known as accounts receivable financing) is the sale of a company's invoice(s) to a finance company (factor) at a discount. The purpose of factoring is to provide immediate and often needed working capital up front, not 30+ days later. Factors will convert your invoices into cash immediately, which can help to cover business overheads such as payroll, salaries, and rent as well as other operating expenses. Factoring cycles billions of dollars annually in the US alone. It is used by companies small in size to companies in the Fortune 500.

Bottom line is directly related to top line. Yes, you can improve profits by cutting expenses. Turning out lights, cutting employees and a number of other cost saving measures can be taken. Some companies have entire departments to review frugality methods. But the surest and best way to increase bottom line is to increase top line income. And how do you increase top line income without adequate capital flowing? How do you employ more salespeople, or order additional product without adequate resources?

Many companies do not realize that by the time they provide work or product, invoice and get paid, that their resources have been tied up over 60 days. Sometimes more than 90 days.

Speeding up the process is one of the critical arts in business. By factoring your invoices you can unlock the value of your receivables today, not a month or two from now. And by unlocking this, your ability to grow is unharnessed. Early payment discounts, the ability to employ additional salespeople, and the ability to write new business without fear.

Unlike typical venture capitalists who provide funds in exchange for equity and control, Factors provide you the funds you need, take no equity and when you are done with 'em -- you can fire 'em!

John H. Tilton | Invoice Advance | It's all in the name! Invoice Advance, a leader in invoice factoring facilitation, enables debt-free financing to businesses small and large.

Source: EzineArticles
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