Obviously the largest precursor to being able to use this type of invoice financing is that the company must be one that regularly invoices other companies for goods or services, therefore meaning that they operate on credit a lot of the time. As well as this proviso, companies that provide invoice discounting services usually only work with businesses that have an annual turnover of more than $500,000, as well as a good history of paying off their debts and controlling their credit. This is not always the case though, so it is often well worth enquiring even if your business is not this large.

Invoice discounting basically means that you can send invoices as normal to your clients, but then you also send the invoice to the invoice discounting company that you have chosen. They will then release up to 95% of the invoice amount to you within 24 hours, which therefore means that you don’t have to wait for ages for the customer to pay you. You then pay the invoice discounting company the money back – plus interest – once the invoice has been paid by the customer. There is generally no need to inform any customers that you are using an invoice discounting service at all.

If you are familiar with factoring, then you will understand about recourse factoring and non-recourse factoring – two things that are also offered when it comes to invoice discounting. With recourse factoring, it means that your business risks debtors not paying their invoices, as you will still have to pay back the loan taken out against the invoice. The upside to this though is that it usually costs a lot less, as there is no risk being taken by the lender.

Non-recourse factoring, however, is usually more expensive as the lending company takes the risk, not you. This means that should a customer not pay their invoice, the lending company takes the financial hit and your business does not lose anything. Should there be a genuine reason why you haven’t received payment though – such as poor goods or services – then the lender can demand the money back from you, which can elevate to legal disputes.

Invoice discounting has a number of large benefits, including:

• An improvement to a business’ cash flow, as there is no need to wait huge amounts of time for an invoice to be paid (often up to 90 days).
• It is confidential, so your customer base does not need to know about you using this service.
• As soon as sales are made, you can draw cash on them.
• Choosing non-recourse factoring will protect you from bad debt.

Related posts:

1. Invoice Factoring – FAQs
2. The Difference Between Invoice Factoring and Traditional Business Finance
3. Glossary of Invoice Finance Terms

As with any major purchase, there are a number of factors that every single business should think about before they put pen to paper with a specific company – which is where we come in at www.trackcompare.com. The different facets that you must think about when picking a company don’t just extend to the price that they offer you, but also into aspects such as the type of service that they offer and even how financially stable they are.

This means that, before purchasing a vehicle tracking system, you should have a number of different questions in your mind. Listed below are the different things that you should undoubtedly be thinking about…

• Perhaps the most important aspect of any tracking product is the quality that it exhibits. For this reason, it is prudent to look for a company with a track record of delivering quality services with the minimum of disruption.
• Make sure that you only go for a tracking system that suit the way that your business runs. Sure, there are lots of nice extra features that some companies offer, but will you ever use them and therefore are they worth the extra cost?
• You should always take a look at how stable the supplier of the tracking system is financially, as you will probably end up with a 3-5 year lease with them if you choose to take their services. As this lease is often paid up front, the last thing that you want is for the tracking company to go bust and leave you out of pocket. It is also possible to pay in monthly installments to further avoid this possibility.
• Make sure that you are fully aware of the ongoing costs, for example charges relating to airtime and software upgrades.
• Should your business often operate abroad, make sure that the tracking system works there and that the roaming charges are not extortionate.
• Ensure that the tracking system will work in all of the geographical areas that you expect it to.
• Make sure that you trial the system before you agree to lease it from any company. This will allow you to decide whether the system is right for you and that it has a positive effect on your business.
• Check the customer service that the provider has, as you could well be on the phone to them should something go wrong. The quicker they can help you resolve the problem, the less money your business will lose.
• Make sure that you get a Service Level Agreement from the tracking provider, along with a warranty on the equipment for the duration of the contract.

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As you might expect from the name, live/real time mapping means that the location of your vehicles is plotted against a map as they move, therefore providing you with the exact location of where they are 24/7.

Most of the different pieces of software will allow the user to specify how they want to view the position of a vehicle, usually by simply zooming in and out, therefore meaning that it is much easier to plan routes and keep tabs on the safety of the vehicle. Every time the user computer receives an update from the vehicle, the page will usually refresh and the vehicle will display its new position. So that you can further track a vehicle’s progress, most systems will also allow a retrospective look at the vehicle’s route, therefore giving further information about how the journey has gone and whether the route could be improved.

Live mapping is one of the most basic features of any tracking system and as such it is included in nearly all of the tracking systems on sale. If you don’t feel that you need it though then you can make some massive savings by not using it or by picking a company that doesn’t offer it.

Satellite Overlay

A satellite overlay is basically what you see if you use something like Google Maps: an aerial photograph of the land, which has a road system plotted over the top of it by the software. In fact, most of the tracking systems actually use Google Maps for their satellite pictures, although some use the rival service offered by Bing instead. Obviously the biggest benefit of this feature is that it is possible to further understand exactly where your vehicle is. For example, you might think that your vehicle has broken down on a motorway, as it is not moving, however using the satellite imagery you will be able to see that the vehicle is in fact in a petrol station and not broken down as you feared.

Reports

Reports are perhaps the single most important part of any vehicle tracking system, as they mean that you can analyze all of the different data from a vehicle’s journey, therefore meaning that you can make improvements in efficiency based on the information received. There are a massive amount of different types of reports available, but some of the most popular ones are:

• Daily Activity – This shows all of the activity that a specific vehicle does in a certain day. This will include data such as: where the journey started and finished, the times that the journey started and finished, the distance of the journey and how long the vehicle was idle for. This type of report will also usually provide a general report as well, meaning that it is easy to read and act on quickly.
• Daily Visits – This will shows the places that the different vehicles have visited and the time that they spent there. This is obviously very helpful in ensuring that drivers are meeting their quota and that they are spending the correct amount of time at each location.
• Driver Performance – This is very helpful, as it will help you analyze the way in which a driver has driven. Details such as their idling time, journeys that exceed their maximum allowance, any instances of speeding and the times that they started and finished work.
• Vehicle Idling – Vehicle idling is something that can cost a company a huge amount in fuel, but it is something that can easily be avoided. You can set a range of the amount of time that a vehicle can be idle for – usually about 5 minutes – and reports will be generated whenever a vehicle exceeds this amount.

Alerts and Notifications

Alerts are a feature that many users of tracking services have come to rely on, as they are incredibly helpful when trying to monitor the way that vehicles move or are driven. They are able to be delivered in a large amount of different ways – email, SMS, “in application” messages – therefore meaning that you will never miss an important alert, regardless of where you are. Below are some of the more common alert types that tracking systems offer their customers:

• Location Based – This will send an alert whenever a vehicle enters (or exits) a predefined area. This has many uses, such as whether the driver is making unauthorized visits – maybe to their home – or whether a driver is approaching a job
• Late/Early – As the name suggests, this will show when a vehicle arrives at a location either late or early, so that you can ensure that they are punctual and therefore providing good customer service.
• Idling – As already mentioned, idling is something that can cost a business a lot of money. This type of alert will notify you when a vehicle goes over a predefined amount of time while idling, therefore allowing for fuel to be saved.
• Driver Activated – These are otherwise known as “panic buttons” and are very useful for drivers who often attend jobs alone or during unsociable hours. As soon as the button is pressed, an alert will be delivered, therefore meaning that assistance can be arranged.

Geofence/POI/Ring Fence/Landmark

Four different names, but in realty the difference between them is negligible. In reality, they are just different names used by manufacturers to describe a certain system. The POI system basically means that you can add a landmark or building to the mapping system that is relevant to the business – such as a depot or a customer’s address – and when the vehicle gets close, an alert will be sent.

A Geofence/Ring Fence is essentially the same system, but there is one small difference; as well as being able to assign a name to an area, it will also monitor the area to provide alerts regarding any vehicles that enter in or out of the predetermined area. This is usually used for places like your office or home.

CAN-bus Integration

The vast majority of vehicles made these days will have a CAN-bus system built into them, which is a system that means that all Electronic Control Units (ECUs) can communicate with each other easily. It works by allowing the tracking system to be connected to it, which then means that it is able to communicate with the tracking application. Huge amounts of different data can be found out through using the CAN-bus integration, such as the MPG, odometer readings and the engine revs, which will all help to save money if they are monitored. It will also allow you to ascertain how well a vehicle is being driven, so that employee safety can be maintained.

One thing that you should look out for is whether your vehicles do have CAN-bus integration, as this is not always the case for vehicles manufactured before 2001. If this is the case, then make sure that you do not end up spending extra money on a system that supports this, as it will obviously turn out to be money that is spent on something that can’t be used.

Driver ID

Driver ID systems are different depending on the tracking company that you choose to use, but they all have the same purpose. They all mean that the driver must carry a special tag with them that emits a radio frequency, or occasionally a card that contains data on it. When the system detects this device, it will report back regarding the person currently driving the vehicle in real time, therefore meaning that you can keep good records of the vehicle’s usage. It is even possible to set it up so that the vehicle will not start unless a driver ID is present, which will protect against theft.

Driver Terminal/MDT (Mobile Data Terminal)

This is an invaluable tool, as it allows drivers to communicate with the office without having to pull over and therefore waste time on their journey. It is a screen that sits on the dashboard, which has the facility to allow two way messaging, which can be used for giving directions to the driver or possibly for the driver to update the office as to when they are getting close to a location. There are also a number of predefined messages usually stored on the system, which makes it easy for drivers to send messages quickly.

Temperature Monitoring

This is a very simple device that senses the temperature of the inside of a vehicle or trailer. This means that certain goods can be transported in the correct environment and should the temperature get too hot or too cold, a notification will be sent, therefore meaning that action can be taken to remedy the problem.

Panic Button

As you probably already know, this is a button that can be pressed by the driver in the event of an emergency. This is then relayed in real time back to another member of staff, either as an email, SMS or on the actual application being used (or all three). This is obviously an invaluable tool for increasing the safety of staff and ensures that all staff are correctly protected.

PTO (Power Take Off)

This is a lesser known attribute to some tracking systems, and it essentially allows the user to monitor whether a certain electrical feed is being used on a vehicle, such as those that operate tail lifts, tippers or cranes. When these are used, the PTO will let the user know in real time, therefore meaning that they can monitor the event and make notes regarding when it occurred.

This feature is incredibly popular with places such as councils, who want to make sure that their road sweepers and gritters are covering the area evenly. Building companies also often use the feature, as it allows them to know what type of work was occurring in what location at any time of the day. They can even use it to work out where different materials were loaded and unloaded, so that they can keep a track of their assets.

Remote Immobilization

This is a feature that means that a stationary vehicle can be immobilized from a remote location, simply by using the application installed on the computer (or through the web application). This is particularly useful for companies that hire out vehicles a lot, as it means that they can prevent any unauthorized use of the vehicle and also discourage any vehicle thefts.

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Within the world of vehicle tracking, there are two different types of software applications most commonly used, both of which are described in more detail below. You should always confirm with the supplier the type of software that they use, as the two have different benefits and one could well suit your business better than the other. That being said, when it comes to the levels of service and security, both are on a par and neither has a clear advantage.

Thin Client

When a tracking system has a thin client, it means that the user has to download a small piece of software and install it onto the computer that they want to use for the vehicle tracking. Generally there is no limit to the amount of computers that can have this software installed on it, but it is always best to check with the supplier to ensure that this is the case. This is because some suppliers require the customer to purchase extra licenses should they want it installed on more than one workstation.

It is essential that any company using a thin client has an internet connection, as this is used to transmit the data to and from the vehicles. Perhaps the best thing about a thin client is that it is usually a lot more powerful than web based applications and therefore it can usually display a lot more detail. The obvious disadvantage though is that the data can only be viewed from a PC with the software installed, therefore meaning that it can be quite restrictive.

Web Application

This type of software is 100% internet based, meaning that no software has to be downloaded and installed onto a machine. This means that users can access the tracking data from any computer in the world, as long as it has internet access. It also means that there isn’t the hassle of having to spend ages installing items – the only thing that most people will have to do is install a few plug-ins, which take seconds to do.

It must be noted that a good internet connection is absolutely vital for both of the types of software mentioned above. Anything less than broadband will cause the tracking system to function incorrectly, and this will usually manifest itself in delays of information, as well as users temporarily being “locked out” of the software.

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1. Common Questions on Tracking Systems
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Making the most of your vehicle tracking system starts from the minute it is set up on your computers and on your vehicles. It is very important that the tracking company helps in this initial stage, as they have the knowledge and expertise to get the job done properly.

There are two vital steps to ensuring that you get the most from your tracking system, which are:

Good Setup

As stated, every single business has different needs when it comes to the use of a tracking system, which means that each set up will also be different. You must ensure that you clearly tell the supplier of the software exactly how you want the system set up, and also why you are setting the system up. The latter step is especially important, as they will be able to suggest features that will help you achieve this goal, as well as set up the more obvious features.

Good Training

Having the software set up is only half the job, as knowing how to use it properly is equally as important. You don’t want to simply have a basic grasp of the system; you want to be able to find your way around every single nook and cranny, so that you can make the most of the system that you have spent good money on. Obviously the more you use the system, the more proficient you will become with it, but the more you can learn from the company initially, the faster your learning curve will be.

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You may or may not have heard about it, but this is option is becoming more and more popular. It has actually been around for some 4,000 years, although it has recently seen a surge in popularity. This is not an option in terms of getting a company up and running-it is more viable for firms that already are thriving.

The reason is, you need some receivables to get money from this strategy. The way factoring works is simple-the invoice company will pay you for your receivable (i.e. invoice). Many businesses do not get paid immediately, because they offer some sort of financing to customers. This is particularly true for firms that offer expensive products, and therefore their clients do not want to pay for everything upfront.

That is where factoring comes in.

With this method, another company actually buys the invoice you create for the customer, thus acquiring the right to it.
They generally buy it for 96-99% of what the invoice is worth, and they keep the rest for the fee. In most instances, they will give you 85-90% of the money upfront, and will keep the rest as a security. Once they have been paid by the customer, they will then release the rest of the funds (minus the factoring fee, of course).

But the percentage of the invoice they will give you varies.

The elements that determine how much they will pay you are the customers credit score, as well as how old the invoice is. The newer the invoice, the better. That is why you want to only do business with customers with a sound financial history, as well as sell the invoice immediately after creating it.

The difference between factoring and a loan

The main variation is that here the firm is buying the receivable from you. Therefore, there are actually 3 parties involved-you, the customer, and the factoring company. With a loan, it is just you and the company.

Factoring is easier to obtain than a loan, simply because it is not based on your credit score. Instead, it is based on your customers score. Therefore, even if your credit is bad, they will do business with you as long as your customers financial history is solid. For this reason, getting factoring is easier than getting a loan.

But it is not a get out of jail free card.

Do not just start selling every invoice you create without at least sitting down and making sure you have the money. After all, factoring fees can eat into your profit margins to the point where it is not worth selling the invoice in the first place. Therefore, figure this out beforehand.

Also, do not rely only on factoring.

There are other things you can do to improve cash flow besides this strategy. For instance, cutting down on unnecessary expenses, improving your marketing efforts, and making good hiring decisions are all important. The bottom line is, factoring could play a role in your overall strategy to improve cash flow.

Related posts:

1. How to Get The Best Invoice Factoring Deals
2. How to Improve Cash Flow Now
3. The Difference Between Invoice Factoring and Traditional Business Finance

What is Invoice Factoring?

Invoice factoring is the process of selling your accounts receivable to a third-party factor at a discounted price. When you sell your uncollected accounts to a factor, the factor will send you immediate payment in return for the discounted sales price. There are two types of factoring contracts: non-recourse and recourse. When you sign a recourse contract, you are liable for the balance due and you must repay the money you are advanced if your customer does not pay the invoice within a specified amount of time.

Non-recourse factoring is much less risky. When you sign a non-recourse contract, the factoring company takes full responsibility for collection and you do not repay your advance if the factor cannot collect.

The Difference Between Financing and Factoring

If you need an increased cash flow and you decide that loans and credit cards are the best option, you have to call your financial institution and apply. The application process for financing can take anywhere from 2 days to several weeks depending on the amount you are requesting. If you already have a credit card, you can call to try and extend your credit limit to free up capital. All of these processes require a positive credit history. If you have poor credit, or no credit at all, traditional financing and credit cards are not the right option.

Invoice factors do not look at your credit worthiness to approve your request. You are not requesting money, you are simply selling an invoice to a company that is willing to collect on it. You do not affect your credit history at all when you turn to invoice factoring. In fact, invoice factoring is far more flexible than traditional financing methods because you can factor as little or as much as you have on your books at any given time. Factoring is a safe and secure type of business finance.

Which Option is Best For You?

If you do not want to spend the resources it takes to collect on debts, invoice factoring may be the right option for you. You can finance your invoices as collateral instead of requesting a loan from your bank so you do not have to pay exorbitant interest. Keep the capital you need to expand and choose an option that makes sense.

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Account – In the context of accounting, an account is a ledger in the books that refers to a company’s assets, liabilities, or expenses.

Account Debtor – A person, business, or organization that owes money on account. This person is responsible for paying the invoice and is the entity a factor will collect the debt from.

Accounting Liquidity – Assets a business owns that can be converted to cash quickly. This is important to businesses who need to pay their bills or need capital for expansion or projects.

Accounts Payable – Monies a company owes to other businesses on account. This account is a liability for the business and is generally the largest liability on the business’ balance sheet.

Accounts Receivable – Monies that are due for products and services a company has already completed. Businesses offer services and products on account for business to business transactions.

Accounts Receivable Aging Report – A report that details how long accounts are outstanding.

Accounts Receivable Aging Schedule – Creditors will use this to analyze payment patterns for approval on various types of business financing.

Acknowledgement Form – A form that is sent once an invoice is sold to a factoring company. This form states that the invoice no longer exists for the client and the factor will remit payment.

Administration Charge – The fee charged by a factor per invoice.

Advance Rate – The rate of money that a factor will advance to a company when they buy an invoice. Rates can range between 70 and 90 percent.

Aged Debtors Ledger – A listing of balances that debtors have not paid when they became due.

Agency Discounting – Companies disclose the factor’s involvement to their customers but they still take on the responsibility of managing their own sales ledger.

Annual Report – A report that shows a company’s financial condition so shareholders can invest wisely.

Approved Debtor – An invoice that is approved by the debtor. The debtor must be approved before the factor will send an advance.

Asset Backed Lending – A type of business finance where the money advanced is backed by an invoice, security, or another type of asset.

Assignment – A transfer of ownership of a payment obligation.

Assumption – When a company or person becomes responsible for the liabilities of another company or person.

Availability – The balance of money available for a company to draw from the invoice finance contract.

Charge Back – The amount of money that is owed to the factor when the customer is not able to collect on debt.

Client – Company who sells their invoices to a factor.

These are all terms that are used regularly in invoice finance. Grow familiar with these terms and understand what you are signing before you enter into a factoring or discounting contract.

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1. The Difference Between Invoice Factoring and Traditional Business Finance
2. Invoice Factoring – FAQs
3. How to Get The Best Invoice Factoring Deals

Invoice Quickly and Accurately

There is nothing tricky or innovative about this tip, but it works. The reality is, many firms either send the invoice late, or they make errors on it that slows things down. Send the invoice immediately, and make sure all the information on it is accurate. This is an incredibly simple strategy for speeding up payments.

Get Rid of Unnecessary Inventory

Obviously every firm that sells physical goods needs some quantities of items on their shelves, but many businesses carry way too much. Therefore, by paying for fewer things in advance, you free up money to use immediately. You might also want to consider using just in time inventory strategies, where you only place the order for the item when you know you are going to need it.

Go After Non-Paying Clients

If a customer does not pay you immediately, do not be afraid to go after them. Many companies stand back and wait politely, but this just encourages them to wait longer. It might seem harsh but it is necessary if you want to get paid.

Do Not Make Your Payments Immediately

If you have bought something that does not need to be paid for instantly, then wait as long as possible. This way, you can leave the money in an interest bearing account, and then only take it out when you need it.

Reward Fast Payments.

If you allow flexible payment terms, reward customers that pay immediately. If you do not offer any sort of advantage for those who pay immediately, then nobody will pay immediately. For instance, lower the price for the item, or give some sort of discount on a future purchase. It is not complicated, but this strategy can be very effective.

Only Deal with Customers with Good Credit

This sounds simple, but a lot of firms do not run credit checks before someone purchases with them. You might want to consider doing so if you want to speed up your rate of payments.

Use Invoice Factoring Firms

This one deserves a special mention because it is one of the most effective strategies of all. These companies will give you 85-100% of the amount of the invoice immediately. After the customer has paid you, they will give you the rest minus their fee.

In essence, they are giving you a cash advance loan, but without the interest rate attached. There really is no risk using these firms, like there would be with a payday loan. If you have been considering using payday financing, then forget it. Instead, get quotes from a number of invoice factoring companies through TrackCompare.com, and use the one with the best terms.

The bottom line

There are lots of ways to get more money in your pocket immediately. These are just a few of them. Implement these tips and you will see fast results.

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1. Why Invoice Factoring Might Be a Smart Choice
2. How to Get The Best Invoice Factoring Deals
3. Invoice Factoring – FAQs

In addition, gas cards help make it easier to manage your cash flow, simply because you do not have to ensure that you have enough money with you every time you need to buy gas. This just helps makes things a bit simpler in terms of planning. Also, since gas is considered a commodity purchase, you needn’t worry about being tempted to buy it just to get the money back-unlike other things you may use credit cards for.

Choosing The Best Card

The truth is, there are a great many gas card providers out there, and finding the best one can be a challenge. To be able to find the ideal gas card, you should consider a few things beforehand.

First of all, consider whether you purchase gas at many different stations, or visit the same station or brand of station every time. This is actually a very important consideration. The reason is, there are specific cards that individual gas brands offer. Then there are cards offered by the major credit card companies. The former will tend to have better rebates, and if you consistently frequent the same station, choosing those cards would make sense. Also, they often offer rebates for anything you purchase in the store as well.

However, the drawback to them is that they are only accepted at those particular stations. Therefore, if you tend to fill your gas tank at many different stations, opting for a major credit gas card may prove the better option. The rebates tend not to be as high, but they are certainly better than nothing at all.

But rebates are not the only consideration. Also, look for gas cards that offer a low interest rate. Again, often the single station cards will have the lowest terms. However, it is always worth comparing the different cards, just to make sure. To obtain the greatest benefit of using a gas card it is best to pay off 100% of the balance on time to avoid paying any interest at all.

Many local banks can also offer their customers gas cards. If you shop around at many different stations and therefore are looking for a generic card that works everywhere, using a bank gas card is another option for you to consider. Check with your bank and compare their offers with what you find online.

Always Read The Fine Print

Some gas cards require you to exceed a minimum spend limit prior to receiving rebates for your gas purchases. Always check to ensure if there is a minimum spend limit for the gas cards you are considering and that your chosen card will fit in with your gas purchase habits.

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