Top Factoring Service Provider in the Country

26/09/2022

Top Notch Solution for Smooth Business Cash Flow and ease of doing business –

by India Factoring (Top factoring service provider in the country)

 

India factoring brings you various ways to increase cash flow for a business including bills discounting, factoring finance, improving inventory, conducting consumer credit checks, and collection services

Only a healthy operation can lead to a healthy business cash flow. India Factoring and Finance Solutions Pvt. Ltd. operate as a leading Factoring services provider in the Indian Factoring market. With a team of experts, we provide customized solutions for account receivables to business enterprises in India.

India Factoring and Financial Solutions Pvt Ltd is one of the select financial institutions categorized as Authorised Dealers Category-III by Reserve Bank of India to carry out specific foreign exchange transactions incidental to your business / activities. As AD Category-III, we are required to update the EDPMS with data of export proceeds on “as and when realised basis” and, to generate Electronic Bank Realisation Certificate (eBRC) only from the data available in EDPMS, to ensure consistency of data in EDPMS and consolidated eBRC.

Being the Export Factor, India Factoring have an arrangement with the Import Factor for credit evaluation & collection of payment. This helps business to focus more on future growth and indirect benefits to preserve its resources on these parameters.

Introduction

An inefficient cash flow can be a dawn of any business no matter how shining mornings it must have seen. Growth and fall, profit and loss are like a rollercoaster for any business. If the business is heading high towards profit and rampant sales, then definitely you need not worry. You must make your attitude a little more aggressive towards sales and you can achieve whatever you want and can also use facilities like icegate.

But, above mentioned is just the glorious picture what if the business undergoes a high financial crisis because of a lack of sales? Any successful business can run deep-throat cashflow issues due to ineffective operations, inappropriate finance, and lack of investing activities.

As per a study, maximum business failures are caused by a poor cashflow system. If the cashflows are not observed diligently then they can lead to very high losses to businesses ending up in even closure of business.

Cash Flow

A cash flow is a real or virtual movement of money. In its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow is mostly used to describe payments that are expected to happen in the future and are thus uncertain and therefore need to be forecast with cash flows.

The healthy sum that comes into the company as revenue earned through sales or the profits earned is called cash inflow. The sum that goes as an expense or debt payment is called cash outflow.

Types of Cash Flow

There are primarily three types of cashflow from three different activities:

 1.     Cashflow from operating activities-

Operating activities include the production, sales, and delivery of the company's product as well as collecting payments from its customers. This could include purchasing raw materials, building inventory, advertising, and shipping bills.

 2.     Cashflow from Investing Activities-

The various examples of investing activities are; -

• Purchase or sale of an asset
• Loans made to suppliers
• Payments related to mergers and acquisitions

 3.     Cashflow from Financing Activities

Financing activities include inflows and outflows of cash between investors and the company, such as:

• Dividends paid
• Sale or repurchase of the company's stock

Export finance

• Net borrowings
• Repayment of debt principal, including capital leases
• Other activities which impact the company's long-term liabilities and equity

Now, as we have understood what Cashflow is and what are its various types. Let us understand some top-notch ideas that we must keep in mind to have a smooth business cashflow.

Avoid Purchase and prefer to Lease

Lease or going rental facilitates any of the businesses to clear payments in small increments and thus it helps I increased smooth cashflow without hindering any of the usual activities. Often small, cashed businesses who can’t afford a lumpsum expense can opt for leasing which might sound to be more expensive than buying but can help in high pressure in relation to cash flow.

Credit checks

Sometimes it does happen that you face a customer who is not that sound party to pay you in cash. In any of such circumstances, it’s better to play wise by issuing a credit check. A delay in payment can affect business quality to a major extent. Also issuing credit with a high rate of interest might interest you as a businessperson for better leverage in the future.

Attractive discounts

Who doesn’t love discounts? a discount on preponed payment can really attract customers and help you also win goodwill with the customer along with early cash delivery. High interest fixed credit also on other hand helps you in better future leverage.

Inventory Invigilation

Instead of buying more of what doesn’t sell, get rid of substances asap even if you need to sell them at a discount. Take an inventory check. Make a list of those goods you buy that aren't moving at the same pace as your other products. They tie up a lot of cash and could hurt your cash flow.

Electronic Payments

Paying electronically makes transactions much easier and quicker. It not only helps you in time allotment, but they also give you grace periods that facilitate your cashback. But you must remember too much debt can also affect your business negatively.

Let your Cash work for You

Chances are if you have large balances sitting in non-interest-bearing accounts, you can find a better place for them to live. You could consider moving them to an interest-bearing account that may earn. So let your money work even when you are sleeping.

Pooling with Other Companies

It’s like a group of four kids who want to buy a drone but none of them is financially sound enough to buy one. So, they plan to pool the amount and buy the same to play together. Similarly, you can find other like-minded people willing to share in cash and achieve lower prices from suppliers.

Immediate Invoice submission

Make sure you understand the basics of how to put together a good invoice. You'll want your invoices to be easy to read and the terms clearly stated. Have the due date stated in a few places (preferably in bold), including at the top of the invoice and on the payment slip at the bottom. Include clear instructions regarding payment types accepted. If you charge late payment fees, make sure you include this information as well

Paying less to Suppliers

Try to maintain goodwill and good relations with suppliers by tactfully talking and pre-deposition of amounts. Learning to master the art of negotiation is an essential part of doing business and could help you convince your suppliers to offer you a better deal.

Savings Accounts

Look for a savings account that can facilitate you with a higher rate of interest. This will provide you with liquidity while growing your cash position.