Why Invoice Finance Is Considered Important For Startup Companies


If you are about to start up a new business or a company, then it is for sure that you are very enthusiastic and full of energy for this journey. But it is not a matter of just one day, that you wake up one fine morning, and voila! you got yourself a brand new company.

Though many of us might wish it worked like that, but it does not! Starting a new company is full of provocations and hurdles. The first question that will come to your mind when you wish to start a new company is, How will I finance my company's startup?

startup companies

It can be very tough for a start-up company to get a loan traditionally through banks. 

Due to the huge risk factor related to a new business startup, banks do not usually give out loans to new businesses.

So what can you do in a situation like this? Are you looking for a loan that will not drown you into further debts? Then you must get a loan that is termed as, "invoice financing."

Now you might be thinking:

What Is Invoice Finance?

Invoice financing is a solution for businesses to get loans and fulfill their financing needs for their new business startup. Businesses choose invoice finance online because it is one of the most flexible loan solutions to take care of all the costs that will be incurred during the start-up of your business.

Why Invoice Finance Is Considered Important For Startup Companies?

Now let us take a look at the reason, why Invoice Finance online plays a significant role in startup companies. 

The principal speculation of why it is the most suitable selection is that invoice financing will see the receivables of your account as assets to be traded. It means that you will earn the profit from that at that specific moment. You will not have to wait for a long time for the consumers to make the payments against their invoices.

Why You Should Choose Invoice Finance For The Start-Up Of Your New Business?

Now you might be wondering, how choosing invoice finance online will benefit you and your start-up business. Well, let us tell you this known fact that invoice finance is great for any kind of B2B business.

Now let us take a look at what advantages you will receive if you choose invoice finance online:

1. There is no hidden or complicated stuff over here; everything related to invoice finance is simple. You just have to fill up a small application. Now, all that you got to do is to wait for your submitted application to get approved. 
2. You can continue your business normally. You can continue to provide goods and services to your consumers.
3. Now the next step is to, create copies of your outstanding invoices. 
4. Now you have to submit these copies of outstanding invoices along with the other relevant documents of your business.
5. Then the factoring company will check all the documentation, and then they will send you the money just within a few hours!
6. You can repeat this cycle as many times as you desire!

Why Is It Important To Use An Accounting Firm For A Long-Standing Business?

There are many services like management consulting, assurance services, or even tax management that accounting firms have to offer. There are even more services that are being offered by some accounting firms. Many people don't understand and realize the importance of an accounting firm for a long-standing business. They play a vital and huge role in a business in the long run. Firms offer a variety of advantages such as fulfilling customers' needs, profit, and value along with free services. If you were surfing the internet for this reason then this article has got you covered. This article will guide you through the importance to use an accounting firm for a long-standing business. 

Accounting firm

Accounting Firms Generate Financial Statements By Your Records

When business is concerned, it is important for a person to know all the profits even including the tiniest loss. The income statement is responsible for the very same reason. They provide you valuable information about the profits and loss in a precise form. Moreover, the balance sheet helps you to see a clear picture of your business. It provides information related to a financial position if your business. Due to this reason, one is able to analyze all its strong points along with few flaws. If a person opts for accounting firms, then he can totally rely on them and count on them.

Accounting Firms Help In Evaluating The Performance Of The Business

The results of the operations and the financial position of business are purely reflected by financial records. To be precise, they help you to keep track of your business financially. They help you keep track of possible debt, expenses, and gross margin. At the same time, they will also help you to compare your previous data with the current data which will help your business progress further. It will also help you in allocating your budget accordingly.

Accounting Firms Ensures Statutory Compliance

Without any doubt laws and regulations can be confusing sometimes as it differs from state to state. But at the same time, one can ease the whole confusion by proper processes and accounting systems. The accounting firm would confirm that the liabilities such as VAT, pension funds, sales tax, and income tax are properly addressed.

Accounting Firms Help To Create Future Projections And Budget 

Budgeting can be a huge issue when dealing with businesses. With the help of accounting firms, one can sort out any problems that are related to budgeting. Financial records play a vital role when it comes to business. The business projections and trends basically depend on historical financial data. Due to this reason, it can turn out to be much more profitable.

Accounting Firms Help In Filing Financial Statements

When business is concerned, financial statements are backed up by accounting firms. Entities that are listed require file along with stock exchanges. These financial statements are very important Without any doubt, one would suffer a lot if he had not opted for accounting firms. Accounting firms provide great benefits and ease up the whole process.

Top Credit Card Processing Trends in 2020

Credits cards are still the driving force of the payment world as it is the most common method of making purchases in-store. The volume of credit card payments has recently surpassed $3 trillion annually and is only continuing to increase.

A Brief Introduction of the Credit Card Processing Industry

There are two types of credit card processors:

1. Front-End Processors

The process ensures that the cardholder's account has enough funds in the account to carry out the transaction. It then routes transactions from merchants to the cardholder's account for access.

credit card processing

2. Back-End Processors

It accepts payment from front-end processors and transfers it to the merchant's issuing account
Although there are multiple credit card processing companies, here are a few of the larger acquirers that stand out.

Adyen

It is a leading credit card processing company, offering a full-stack gateway to eCommerce businesses. The company deals with risk management, payment gateways, and front-end credit card processing services.

Fiserv

Fiserv offers its full-stack payment gateways that comply with the payment methods of more than 100 different countries. In 2019, the company bought First Data to secure its data transference processes. The combined synergies may generate $500 million in revenue in five years.

Total System Services (TSYS)

It is the third-largest payment processor in the US, serving more than 3.5 million small and medium merchants. The company works with 1,300 different financial institutions in 100 countries. In 2019, it acquired Global Payments. Together, they aim to generate $300 million in revenue.

Elavon

The company is the fourth largest acquirer in Europe and seventh in the US. It is the subsidiary of US Bancorp, designed to provide online transactions and in-store payments. The company partnered with Sage Pay to increase its payment gateway market share in the UK and Ireland.

Latest Trends in Credit Card Processing

The future of credit card processing will be subject to game-changing trends that continue to evolve over time. Read ahead as we discuss these two trends in detail:

Rewards

A recent study shows that around 75% of the consumers have various reward systems attached to their favorite cards. The survey also highlights that the quality of the rewards program is the number one factor considered when consumers choose which credit card to sign up for. This held true across age groups as millennials and Gen-Z showed the same preference. 

The three prevailing reward trends in 2020 are:
  • Flexible Incentives---the ability to select benefits based on personal choices
  • Bonus points for an eCommerce shopping
  • Bonus points on shopping at select outlets
However, as the industry matures, the reward structures of these programs is beginning to shift. Experts predict that companies would require you to spend a specified amount of money within the set deadline for activating bonus points and rewards.

While in some sense, the incentives are appearing more and more attractive to the card holder, they are being asked for more significant spending on habitual shopping, such as dining, transit, and subscriptions. Ultimately, cardholders earn more on continued loyalty, but they are having to spend more than ever to attain those benefits.

The Great Market Shift

The increase in the growth of millennials and Gen-Z consumers has forced businesses to adapt to new technologies in the payment processes. Depending on contactless payment methods, millennials have boosted the prevalence of mobile point-of-sale.

These solutions accept payments from e-wallets, online transactions, and digital money. A recent survey shows 50% of the Gen-Z consumers have used e-wallets once a month, while 75% have used digital apps to make online payments.

By the end of 2024, there could be more than 16.6 million mPos terminals across the US and mobile in-store payment will project at the rate of 23.9%.

Rise of Mobile Payments

The younger generation prefers easier and more convenient ways to make purchases. They choose payment methods that function and respond according to their demands. PIN-based contactless payment via mobile devices is currently the most popular payment method among millennials and Gen-Z.

One of the contactless payment methods that is gaining traction today is Apple’s new credit card, Apple Card. After the Apple card launch, the company claims two-fold growth in transaction volume and revenue generated yearly. However, its success relates directly to the payback offers it provides to the consumers.

Apple card users receive 2% cashback on purchases via its e-wallet and 3% returns with select merchants. The rise of Apple Card has given a definitive boom to the overall digital and mobile payment industry. This also paved the way for contactless cards, which people can use in the local transit system, including various subways and metros.

Research shows that 50% of the transactions at the retail outlets are through contactless payment terminals. More than 55% of the shoppers own contactless cards and use the tap function to make the payment. The intertwining of technology and credit card payment processes are bound to grow throughout 2020.

Prevalence of Co-Branded Cards

Many payment startups and ventures have joined hands to offer a wide array of services to increase their consumer base. Such a cooperation attracts a larger number of users and creates credit cards serving an extensive range of consumer needs.

Although each credit card company offers a reward system, it has become challenging to stand out in the market due to massive competition. Thus, these mergers may provide consumers with long-term benefits and retain them for a lifetime.

Increase in Credit Cards Fee

Amid the fear of potential recession in 2019, many card issuers were cautious of their marketing and sales strategies to increase or maintain revenue. Thus, there were fewer launches and a decrease in the number of financial incentives.

The global pandemic has worsened the situation, thus tightening card issuers' budgets as the rate of risk increased. This could lead to higher credit card fees and annual charges in 2020 to compensate for the market losses. 

Conclusion

The more you keep yourself updated with the latest trends, the higher the chances to stay financially sound, regardless of the change in the payment dynamics. This will help you to make the right choices necessary for a secure financial future.

About the writer: Lou Honick is the CEO of Host Merchant Services. Prior to founding Host Merchant Services in 2010, Lou was the founder of HostMySite.com and received numerous awards including SBA Young Entrepreneur of the Year, Inc Magazine 30 under 30, and multiple listings on the Inc 500. As a serial entrepreneur, all of his companies have operated on a singular devotion to outstanding customer service and support. Lou is a respected expert on the topics of customer service, payments and fintech, Internet technology, and entrepreneurship.

5 ways to save money during the COVID-19 pandemic

If you’re like everyone else, chances are you likely struggle to put some cash aside every month. Whether it’s coffee or eating out with friends and family, spending has become an intrinsic part of life.

With the COVID-19 pandemic in America showing no signs of slowing down and restrictions reintroduced in other nations, now is perhaps the best time to continue sheltering in place.

Spending habits

Even if you’re within a low-risk group, going out less will undoubtedly help you reduce your spending. Furthermore, with unemployment on the rise, prudent spending habits will be the order of the day.

Here, we take a look at how you can make the best out of this situation.

1. Learn how to cook

The conveniences of modern-day living have spoilt us to a ridiculous extent. 

Tired? Or just lazy?

Whip out your smartphone and within the hour a delivery person will be knocking on your door. 

All of these conveniences come at a cost - both financially and physically. From a financial standpoint, the ridiculous markups delivery services charge can turn a simple takeaway meal into an expensive affair.

Additionally, the excess quantities of fat, sugar and salt in these meals can take a toll on your health. In the long-term, you’ll find yourself having to spend hard-earned money to treat illnesses or health conditions caused by an unhealthy lifestyle.

Forget takeout, pick up a few cooking skills, and start preparing your own meals. As your skills improve, you’ll gain immense satisfaction, both in terms of money saved and delicious meals eaten.

2. Start working out at home

While gyms across America are reopening, the highly infectious nature of the Coronavirus have called for renewed protective measures. All of this means that your workouts will likely never be the same again.

Instead of paying good money for a watered-down experience, why not cancel your gym membership and work out at home.

For that to work, you’ll most obviously need to have equipment of some kind. Or do you?
Besides being free, body weight workouts are one of the most effective forms of exercise - they’re quick, convenience and burn plenty of fat.

With dozens of tutorials from content creators working out at home, you won’t even need to pay for a personal trainer.

All you need is an internet connection and a smart device. With body weight workouts, you can keep in shape for free and still have some extra cash saved up every month.

3. Thin out your subscriptions

If you haven’t performed an audit of your monthly expenses, now is perhaps the time.

Take a look at your streaming subscriptions and choose one. Netflix, Amazon or Hulu, make a choice and stick with only one. While you may be spending more time at home, there’s only so much TV you can watch.

As a rule of thumb, if you use a service less than 3 times in a month, then it has to go. People often forget that cash spent on subscriptions can add up when left unchecked.

After going through your subscriptions, perform another audit at the end of the month and see how much you’ve saved.

4. Go for supermarket brand products

Supermarket brand products aka private label products have it rough. Consumers write them off as being somehow inferior where in reality there is literally no difference in quality.

The fact is that private label and branded products are often manufactured by the same company. Supermarkets have strict QC procedures in place when it comes to private label products.

After all, they would only be shooting themselves in the foot if they sold horrible products that carried their brand name. The lower marketing costs allow supermarkets to sell them at a price as competitive as the MLB odds.

So, the next time you’re out shopping, skip the branded stuff and go with the supermarket brands.

5. Put aside extra cash

If you’ve carefully followed all of the above, you’ll likely find yourself enjoying a surplus every month. 

Store all extra cash aside and deposit it into a separate bank account - preferably an interest bearing one and leave it alone. This helps you get into the habit of saving money for a rainy day.

Even if things are looking rather uncertain, it’s no reason to not be financially prudent. With so much uncertainty, these habits will serve you well in the days to come.