Hiring employees can take some of the administrative and operational pressures off of you. If you can no longer do everything on your own-or you want to do more but don’t have the time or specific skillset to accomplish it-it’s time to get help. Entrepreneurs need to research the requirements for any locations where they will conduct business. Professional licenses (e.g., accounting, attorney, physician, engineer)Īs you can imagine, there are many more applicable to different industries and business activities.Examples of the possible licensing requirements include the following: States and local government agencies’ rules and regulations vary for different types of business activity. If you’re expanding your product or service lines or extending your reach to other locales or market areas, you may need to apply for new licenses or permits. Getting the required licenses and permits The primary benefit of S Corporation election for a C Corp is that it avoids the double taxation of income distributed to shareholders.Ģ. In the case of an LLC, the S Corp election helps minimize a business owner’s self-employment tax obligations. That means the owner’s personal assets (home, vehicles, retirement investments, etc.) receive protection from the debts and legal liabilities of the business.Īlso, LLCs and C Corporations that meet the IRS’s qualification criteria may choose to be taxed as an S Corporation. Rightly so! Forming either of those business structures creates a separate legal entity for the company. It becomes the agency’s job to collect the amount from your customer, and many businesses have used receivable factoring services as a way to encourage late paying customers to adopt a more timely approach. The business is able to retain a positive relationship with its customer as the factoring agency is the one that contacts the client if the invoice is late. While the business can expect to pay from 2 percent to 3 percent every month for the service, it can be a useful and effective alternative. When a business uses the services of a receivable factoring agency, it is literally like getting paid immediately by the customer. It is a great way to unlock additional liquidity for your business and resolve the imbalance in sales and cash flow. Receivable invoice factoring is not a loan but rather a convenience fee that is paid to an agency who is willing to advance you the value of your customer accounts receivable invoices. They are not lending you money they are simply allowing you to withdraw amounts immediately from the value of the invoices that you know will be processed in the next one to three months. To qualify for a loan from a major financial institution you must meet a number of different criteria, including providing evidence of collateral and a good credit history. If you are a freelance professional or a small business owner and fully self-employed, the chances of you qualifying for an unsecured loan are low. In the current economic climate most banks are simply unwilling to extend credit, particularly to entrepreneurs without significant collateral. Many people confuse invoice or receivable factoring to be a loan. It is not. But you can improve your cash flow and get access to your money sooner with an accounting practice known as "factoring." Is Invoice Factoring a Loan? After all, as a business you have bills to pay as well, and those bills happen every thirty days without extended payment options. It may not be fair but it is the nature of the transportation industry. While it is commonplace to extend thirty, sixty or even ninety days credit to longterm or volume customers, the extended payment period can create some significant problems.
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