Waiting for invoices to be paid can put a strain on businesses. However, those invoices can be used to secure finance without having to resort to loans or overdrafts. This is done through invoice financing.
There are two kinds of invoice financing; invoice factoring and invoice discounting. With both, an invoice financier buys the debt and forwards up to 85% against the value of the invoices. The balance, less any fees and interest, is paid once the clients have settled their invoices.
With invoice factoring it is the invoice financier who is responsible for pursuing and collecting payment from clients for the unpaid invoices. While this will save businesses a lot of time and trouble, their clients will know that a third party – in this case the invoice financier – has been used to collect the debt. This in turn could harm the reputation of companies using invoice factoring. This can be avoided by using invoice discounting.
Invoice discounting operates in a similar fashion to factoring, with a percentage of the value of the invoices paid by the invoice financier upfront and the balance paid when they have been settled. However, it is the business which issued the invoices which are responsible for securing payment and forwarding them to the financier. This means that the client owing payment need never know that an invoice financier has been used.
Companies wanting to use invoice financing should be aware that most invoice financiers deal with only commercial invoices. This means that those who provide goods and services for the public may not be able to use this form of finance.
Whether you’re looking for the latest forex news or for an article on John Keynes economic ideas, the internet is an excellent source of information, and is more readily available than books in many homes in the UK. However, when using internet sources, it’s important to ensure that the information is good.
How can information be bad?
There are a couple of ways in which essays can be tripped up by bad information.
Satirical and spoof internet sites such as The Onion, and the Daily Currant, can appear to be upstanding news sources and it is partly their similarity to websites like bbc.co.uk that adds to their humour. However, whilst the information should be obviously silly and incorrect, it isn’t always.
There are also many people who create websites to use as their own personal soapboxes, but just because the information has been published on the web doesn’t mean that it is factual. It isn’t always obvious that the information is bad, and sometimes writers go out of their way to make it look good.
Spot the signs of bad information
You should always double check your sources. Use books where possible, or check the internet for more sites that say the same thing. If you can only find one instance of the information, or if you find lots of instances but all using exactly the same phrasing, there is a chance this is bad information.
Take a good look at the site you got the information from. Can you spot spelling errors? Grammatical issues? (‘Your’ and ‘you’re’ are common mistakes to watch out for). How about the site itself? Is it a professionally designed site, or one that appears to have been cobbled together?
You may need to carry out some detective work when searching for information on the internet but it’s important to ensure that your sources are solid.
When it comes to currency trading, forex is one of the most liquid exchange markets available today. The market is huge and traders who are involved are looking to achieve profitable results consistently; in order to do so they must develop a complex strategy. Unfortunately, recent reports indicate that about 95 per cent of traders are unable to achieve consistently positive results. That is largely because most of them focus on unreliable information, which means they make the worst possible trading decisions.
Understanding the basic essentials
To develop a lucrative forex currency trading strategy, an investor must consider a number of key elements, such as technical indicators, trading systems and money management techniques. All trading decisions must be made based on certain technical indicators, such as price fluctuations. For example, a broker can make a massive profit by following a simple day trading strategy, which consists in buying when the currency is low and selling when its price goes up.
To get the best out of using a certain strategy; for example, day trading, the individual should develop his or her personal forex day trading system, one that fits their specific needs and goals. This means each trader has to make an ongoing effort to develop a system that works perfectly for him or her.
In addition, multiple money management techniques can help traders make profit without risking too much. A good rule of thumb is to invest around one per cent of the money deposited in their forex account. Although this is likely to result in only small returns on investment, it leads to exponential profit growth over time.
After creating a particular trading strategy, traders should try it on a forex demo account. Once a particular strategy delivers consistent results, it can be transferred to a ‘live’ forex account.
Forex day trading is a very specialised strategy. It involves opening and closing market positions within the same day. With this form of trading, no positions are ever held overnight.
Day trading allows traders in the forex currency market to try and benefit from the fast-fluctuating forex rates. There are also different strategies which can be used within this form of trading. One is called scalping, where positions are opened and closed during very short periods of time, such as within minutes or seconds. Another option is keep the position open for hours before closing. A competent FX day trader may well switch from one strategy to the other during the hours of trading.
The main advantage of day trading, particularly for experienced professionals, is that a profit can be turned very quickly. There can, however, be pitfalls for the unwary.
Anyone intending to undertake forex day trading will need to be prepared to stay in front of the computer screen throughout the entire trading session. Where automated trading is being used there will have to be absolute faith in the forex software being used.
In currency day trading traders need to be skilful and have a comprehensive understanding of the forex market. A thorough grounding in forex and a wide knowledge of how the market operates is absolutely essential if anyone is going to make a success of it. This makes a day trading strategy unsuitable for most novices or those unable to dedicate enough time to it. Indeed, most day traders are industry professionals who have the time required to concentrate fully on this form of forex trading.
Forex, however, is the biggest financial market in the world and for those traders with the skill and competence, as well as the confidence to take the risks, day trading can be a very rewarding occupation.
Invoice factoring is a way for companies to raise extra finance. Its main advantage is that it can be used to gain access to cash very quickly, which is especially important when cash flow is drying up.
A big advantage with factoring is that, unlike bank loans or an overdraft, it does not involve companies seeking an influx of funds becoming burdened with extra debt. The process involves companies exchanging their debtors list for cash, by employing invoice finance brokers such as Touch Financial services.
Another benefit of raising cash through invoice factoring is that the company’s credit history is not taken into account. However, the fact that an organisation can use this service to boost its cash flow might also help improve its credit score.
Factoring is a relatively simple process for companies seeking invoice finance. The amount of cash provided is relative to the value of the sales invoice. This makes it ideal for a wide range of enterprises, from start-ups to already well established businesses.
By factoring a company may be able to receive up to 90% of the value of its invoices, which is often paid within 24-hours. The company receives the balance, less any fees owed to the broker, once the invoice has been paid in full.
Invoice factoring also gives the client company access to a range of other services from the broker. It is the broker that uses its experience in following up and chasing payment of the invoice, potentially saving the company a great deal of time and trouble. A major cost saving is possible if it does not have to maintain its own credit control department. The broker may also offer bad debt protection.
A business that has previously not used invoice factoring to improve its cash flow may well want to learn more before proceeding with this option. If so, Touch Financial Factoring advice is free and readily available online.
There were a few glimmers of hope for business and the odd cloud with a silver lining in the Chancellor’s statement yesterday, but the one measure which seems to have gained almost universal approval is the crackdown on the “antiquated” public sector pay rises. It is hoped that such a move will, in the long run, help companies that are located away from South East England more competitive.
In the “House” George Osborne has declared that no longer will public sector workers get that annual increase, something that has not happened in the private sector which has to compete against this sector. Making a comment John Longworth who is Director General of the British Chambers of Commerce is quoted “For time immemorial pay in the private sector has been linked to performance. There’s no reason it shouldn’t be the same in the public sector.”
For some time now the public sector has been outstripping the private companies with what are looked upon as extremely generous increases which simply cannot be afforded by industry and commerce. The Federation of Small Business also warmly welcomed the proposals, believing that they will be able to compete for workers on an equal or better footing.
Other parts of the moves have been welcomed such as investment in transport, science, education, as well as defence procurement.
Being kept waiting for payment is a major problem for many businesses. The goods or products have been provided, the invoice issued and the company then has to await payment. Often the customer has 30, 60 or 90 days in which to pay and during this period the company has no means of accessing the cash it is owed.
If payment is late there can be further problems, because the company still has to pay its suppliers, staff salaries and other overheads, not to mention hampering its efforts to expand and provide further employment. In extreme cases, late or delayed payments can even jeopardise a company’s very survival. Fortunately, there is a solution to the problem, in the form of invoice financing.
Invoice financing is provided by brokers such as Touch Financial services. By employing the services of such brokers a business is able to release a large percentage of the cash it is owed. This means the company is able to secure the money so necessary for its financial health and its day to day survival.
There are two different types of invoice financing; one is invoice factoring and the other invoice discounting.
In the case of factoring the broker takes over all responsibility for debt collection from the client company; in other words, a full credit control service is provided. Invoice factoring can, in general, pay up to 90% of the invoice value within 24 hours or so, depending on the status of the client company.
Invoice discounting is ideal for companies wishing to receive payments against unpaid invoices, but that prefer not to let their clients know they are using a third party to collect the money. As with factoring, up to 90% of the value of unpaid invoices can be paid, but in this instance the client company retains its own debt collection and credit control functions.
The chosen forex broker is likely to have a big influence on trading style. The broker can have a crucial role to play in deciding whether an individual is successful or not. When looking for a broker, it is important to find one that can cater for all your needs and offer the tools required to make money effectively.
Before signing up for a live account with a company, it is well worth trying out the various software and trading platforms available. Most will give access to a full or sample version of their trading platform, at least for a limited amount time. Be aware of companies that offer different spreads between their live and practice platforms.
When testing, you should spend some time investigating whether the information and forex charts you need are easy to find and whether opening and closing orders and positions is easy. It is important to be able to rely on the broker to act as soon as possible on your decisions.
The best forex brokers offer customers easy ways to get in contact with them. It is useful to be able to discuss any issues or problems immediately when investing real money and many traders acknowledge this by offering a range of communication options, including live chat and telephone services.
They also provide helpful tools like tradestream to analyse trends in the market, as well as advice and information from industry experts. Some major forex brokers also offer optimised smartphone apps that can be incredibly useful for those who like to trade on the go.
Having attended an introductory seminar on the possibilities offered by online forex trading, many novices are eager to get involved in this potentially lucrative industry. Once they realise how much homework has to be done before becoming a successful trader, however, many of them develop uncertainties. Learning to interpret a multitude of fundamental and technical indicators and charts, not to mention becoming familiar with concepts such as money management and trading systems, may suddenly seem overwhelming.
This is when many of them turn to professional money managers to carry out online currency trading on their behalf. With a managed forex account it is not necessary to know anything about the intricacies of the marketplace yourself, you simply employ an expert to trade on your behalf.
Benefits of managed accounts
Arguably the biggest single benefit of a managed fx trading account is the fact that it is possible to benefit from the experience of someone who has been in the industry for many years. There is no quick way to become a master trader and for individuals who do not have the time to acquire the necessary skills, a managed account might be the perfect solution.
Managed accounts are also ideal for people who simply cannot handle the stress involved in dealing with trades that start to go the ‘wrong’ way.
Dangers of managed accounts
Perhaps the biggest danger involved in using a managed forex account is that the person who handles your trading funds might misrepresent his or her track record, experience or qualifications. The services of these money managers come at a price and it is up to the individual to do the necessary research to ensure that a particular individual or organisation does indeed have the necessary qualifications, experience and skills required.
Failure to invest is costing SME’s a huge amount in lost business, to the tune of £5.4 billion according to a subsidiary asset finance provider of Royal Bank of Scotland Group, Lombard. This is due to them trying to operate with equipment that should have been replaced years ago. The same thing was the cause of the demise of British Motor car manufacturers in the seventies and eighties when they were competing against German and Japanese makers who had invested heavily. The case today is not the same as then as strikes and management worker conflicts were costing the companies’ day of lost production.
Poor awareness of asset finance is thought to be one reason behind unwillingness to update ageing industrial equipment. Machinery can be bought without a huge upfront payment through using leasing or hire purchase.
Of course the health of the SME has to be taken into account before embarking on a long lease agreement, but a well-managed business will not invest or take on liabilities on a lease-hire basis nor any other, if the economic climate does not suggest that the investment will allow an adequate return on investment. Asset financing is one way to keep a healthy cash flow and ensure that the money supply is sound. Leasing and hire are very good ways to keep ahead of the competition and acquiring new plant and equipment.