Category Archives: Finance

Choosing A Provider Of Merchant Services

There are some things that can help in the determination of which is the best credit card processor. There are very many options that are available in the market today and this means that you have to be even more careful. It is important to select processors that can focus on some factors that are relevant to the company you are running.

The fee

The fees charged can actually increase as time goes by. A provider that allows for the negotiation of the percentage is the best. It is also important that all pricing differences are well understood and all variables such as credit card types, the value of the dollar and volume should also be laid out. Fees and should also be understood and they vary in accordance with variables.

The cash flow

This is yet another thing to consider. The credit card processors are responsible for holding the cash from processing time up until the time you get it in your account. It is important to appreciate the fact that different processors use different systems and they can manage time so as to earn some interest. When you choose a merchant provider that offers payment wallet, then you can gain access to the funds immediately. Sometimes the fees of companies aren’t as competitive as what independent providers offer.

Some of the questions that you should ask before choosing the merchant account

· Customer support: this is important because you may need some technical support from time to time. A good merchant service provider will allow you access to customer support 24/7. This will guarantee that issues will be addressed as soon as they arise.

· Live support: this has become very popular in the present times. Some of the companies have email support, but sometimes when you have a problem, you may want to talk to someone in real time.

· Time the company has been in operation: a provider that has a track record that is proven can really help. This is because the team has been able to build a reputation and specialized in the field.

· Offline and online transactions: as the business expands, do not keep on switching the merchants because they lack some of the services. It is essential to work with a merchant who will be able to help the retail business go online or offline.

· Fraud protection: ask the merchant about the ways they use so as to protect financial data because it is very sensitive.

· Funds processing time: it is important to have a predictable cash flow if you want business to prosper. You therefore need a provider who can tell you clearly how long it will take to clear the funds. This helps you avoid any surprises that can derail the operation of the business.

Man That Is Destroying the World

Their goal is hoarding as much as they can while showing the rest of the world how great they are. What they don’t know is how poor they are.

Following my reincarnation and with a strong link to the Spirit of the Universe it has led me to see the big picture. At a time shown to me between lives it called to take me away from the world and teach me what life is about.

It’s a simple story but one that would be above the heads of most who try to understand it in the light of religious teachings and the greed that has impacted the earth. This is our only planet on which we can live and yet man is destroying it at a great rate of knots to make money and stick it in the bank or some investment portfolio.

My first commission is to tear down the wall of blindness and recover God’s people who are caught up behind a wall of lies and confusion. In fulfilling that goal it was important to understand how and why things have developed to this point. We are on the brink of destruction and the earth and all life on it is at risk.

That wall is built by man’s imagination and false gods that have been created to explain life and death. In their efforts to be powerful men devised heaven and hell and used them as tools to rope others in to their opinions and dreams. If they could convince others of their own convictions, then for them they became true.

That’s why religions are now so powerful and rich. The leaders know nothing of the Spirit and they push money ahead of common sense. Through trade and then domination of nations riches became more important than life itself and all one needs do is look at how many suicide when they face financial ruin.

The Finance Industry

There are two types of Latinos in the USA. One is the immigrant seeking a better life and wanting the American dream, whether they came through the proper channels or not it is irrelevant. The second, are the Latinos that are born here. These are two very different groups of people with different needs and goals. Most immigrants bring their culture, traditions, and customs with them to the US. Those born here develop a blended culture that is both Latino and American.

Financial Institutions are taking notice and making strides to accommodate this very economically influential population. The main reason is that there is a lot of investment in education and developing trust. An untold detail is that in Latino countries, people do not trust banks and financial institution because of corruption. Everything is paid in cash and there are no debt or traditional credit scores. This means that the Latino community have cash, probably stored under their mattress or in a shoe box.

This is very dangerous considering that a house fire could burn an entire life savings. Another scenario is they could become a target for robbery. This is a foreign concept for Americans. What is happening is a huge learning curve, educating them on the process of building credit, saving their money in a financial institution, getting loans (mortgage, car, etc.), and most important having trust in the financial institutions.

The younger generations that are born here learn from their parents and surroundings. There is still a disconnect from the importance of financial products, building credit, and how that process works. Many of these young people are just translating for their parents,

explaining financial products, and become an intermediary for conducting business. You will notice an increase in bilingual support at many financial institutions for this reason. There is still a lot of work to do in this regard, and this process will take time.

The Blockchain Technology Important

They would have to verify their agreement with third parties – banks, legal teams, government registration and so on. This brings them back to square one in terms of using the technology to save costs.

In the next stage, the third parties are now invited to join the real estate deal and provide their input while the transaction is being created in real time. This reduces the role of the middleman significantly. If the deal is this transparent, the middleman can even be eliminated in some cases. The lawyers are there to prevent miscommunication and lawsuits. If the terms are disclosed upfront, these risks are greatly reduced. If the financing arrangements are secured upfront, it will be known in advance that the deal will be paid for and the parties will honour their payments. This brings us to the last stage of the example.

If the terms of the deal and the arrangements have been completed, how will the deal be paid for? The unit of measure would be a currency issued by a central bank, which means dealing with the banks once again. Should this happen, the banks would not allow these deals to be completed without some sort of due diligence on their end and this would imply costs and delays. Is the technology that useful in creating efficiency up to this point? It is not likely.

What is the solution? Create a digital currency that is not only just as transparent as the deal itself, but is in fact part of the terms of the deal. If this currency is interchangeable with currencies issued by central banks, the only requirement remaining is to convert the digital currency into a well-known currency like the Canadian dollar or the U.S. dollar which can be done at any time.

The technology being alluded to in the example is the blockchain technology. Trade is the backbone of the economy. A key reason why money exists is for the purpose of trade. Trade constitutes a large percentage of activity, production and taxes for various regions. Any savings in this area that can be applied across the world would be very significant.

As an example, look at the idea of free trade. Prior to free trade, countries would import and export with other countries, but they had a tax system that would tax imports to restrict the effect that foreign goods had on the local country. After free trade, these taxes were eliminated and many more goods were produced.

Money Conversations

These conversations are the ones we often avoid, as they bring up all sorts of disempowering money beliefs. We discussed how to make these conversations a routine practice and give them a methodology so that they aren’t as daunting to embark upon.

Powerful conversations can follow a format that eases some of the tension. Follow these steps and engage in, rather than avoid, the money talks that change your life.

1. Take a moment before the conversation to breathe and set your intention for the way you want the discourse to go. Decide on the outcome you want ahead of time and be very clear in your own mind before the other person is present.

2. Be free from emotion and set the agenda with the other party. Inform them as to the reason for the discussion, the outcome you desire, and the discussion points you plan to cover.

3. Stop and listen. Make sure the other party has a chance to say their piece and that they know you hear them. Repeat back and summarize their ideas – whatever you can do to establish that you understand what they are saying.

4. Offer several options for resolving the situation in various ways, if at all possible.

Find agreement, even if it’s to go to another decision-maker, and detail the subsequent steps, including who will do what, by when. Be sure to close the conversation positively.

After returning home from the conference, I immediately put this methodology to use and had two such conversations. I have been breathing a sigh of relief ever since! While it is important to take on these conversations under any circumstances, if you are intent on making a career shift or growing your business, this is a skill that is especially helpful and will pull you forward dramatically.

When you avoid courageous money conversations, you can be inadvertently sabotaging your own success. For example, a mom was recently telling me about her daughter, who has a job she loves. She is appreciated by her employer, coworkers, and customers, and received a promotion four months ago. She has not, however, received a salary increase to go with the promotion. Instead of having the conversation that needs to be had about the salary increase, she decided to look for another job. Objectively, this seems ridiculous, but she is so averse to having the necessary salary conversation that she has created a story in her head about what this all means and is taking a somewhat misguided action in response. For her, she believes it may actually be easier to land a new position than to have a money conversation where she would be championing her value to the company.

Similar to this case, when I work with clients, I often see two primary challenges:

1. Putting a voice to owning their value, and believing it as well. Examples include stating their fees, saying no to a discounted fee, or negotiating their salary.

2. Speaking honestly about an issue that makes them feel vulnerable. For example, discussing business plans with a spouse or renegotiating a loan they are having trouble paying.

Of course, taking a stance for your money will feel awkward at first. However, once you get a few of these conversations under your belt, you will be looking ahead for the next one! It’s about building a muscle over time that will increase your power across the board. Don’t be afraid to jump in headfirst – I promise you will be glad you did.

Stop Burning As Much Money & Boost Your Business’ Cash Flow

1.NOT LINKING YOUR BANK TO XERO

Why?

You could potentially miss when a customer pays, or worse not notice if they don’t pay, and may run into cash issues using old data, rather than real time up to date information.

What to do:

Imagine logging into an app every day which has pulled in the bank transactions from your online banking system. This means you can immediately match payments in and out of your bank to your customer invoices and any payments due to suppliers such as hosting costs, contractors etc. Xero Touch operates on IoS and Android and provides a real time hand held update on your business finances, meaning you can be anywhere in the world and never be in the dark.

2.NOT BILLING YOUR CUSTOMERS ON TIME

Why?

There is nothing worse than doing the work, getting side-tracked with the next job and forgetting to bill for the first job. This can cause cash flow issues if it extends into more and more jobs, yet too often we find people are literally too busy with the work to action this.

What to do:

1) For one-off projects, when agreeing on the initial fee for the job create a quote on Xero which you can then turn into an invoice at the touch of a button when the work is done; and

2) For retainer jobs or repeat, subscription income create a repeating invoice on Xero which means the invoice gets issued each month until you tell it to stop. As an example, our invoices go out on the 1st of each month while we are sleeping!

 3.NOT SENDING YOUR INVOICES TO THE RIGHT PERSON

Why?

If your customers are small businesses, this won’t be a big issue as the person you agree to do the work for will likely also pay the bills. Imagine, however, that you are dealing with much larger firms, with multiple sites, multiple departments and running bureaucracy crazy processes. If you don’t get the invoice to the right person and department it simply won’t be paid when you need it to be.

What to do:

When the fee is agreed with your contact get details on how the invoice will be paid, specifically finding out if the invoice needs a reference for their system (e.g. a purchase order) and the details of who the invoice should be emailed to (never post An invoice when it can be emailed!). Then email the invoice from Xero to your contact and the payments department and attach all the backup to the invoice when sending.

Invoice Finance

What is invoice finance?

It is the sale of a company’s sales ledger for cash providing an ongoing source of cash as invoices are issued to customers by the company. The company might retain the collection of cash or transfer this and the associated credit risk, to the funder.

Some conventional IF facilities can impose numerous types of fees and charges, and require security and a commitment from the company to sell the its entire sales ledger to the finance company.Some companies offer a refreshing financial alternative, offering to buy just a single invoice and charging as few as just one fee and generally offering a more flexible funding alternative.

What is single invoice finance?

As its name suggests, it is the purchase of one invoice for cash from a company. The company does not need to sell any further invoices so single invoice finance can be used by companies to raise cash as they need it. Also, they might not need to provide security such as a debenture or a personal guarantee.

Single or multiple IF are effective tools for cash management because they liquidate illiquid assets i.e., they convert debtors into cash. The cash realised can be reinvested by the company in profitable projects or used to pay back expensive debt.

Some borrowers might argue that on an annualised basis, the cost of invoice finance is high compared to a conventional loan. That comparison is like comparing apples to oranges because the two financing instruments work differently. A loan is a continuous source of finance whereas single invoice finance is discrete – providing finance for up to 90 days or less. Annualisation of the cost of invoice finance is not therefore consistent with its use.

Though the interest rate on a loan might look relatively attractive, the cost of arranging and administering it must also be factored in, such as the arrangement, commitment, non-utilisation, and exit fees, plus servicing charges and legal costs of documentation. There might also be costs to pursue and recover bad debts, or to pay for credit protection. Invoice finance has its own arrangement and administration costs that might be more or less than a bank loan.

Invoice finance is therefore a credible alternative to a loan because:

  • it converts a company’s debtors into cash that may then be reinvested to potentially generate positive return for the company.
  • the company can transfer debtor credit risk.
  • it avoids using up a bank’s limited credit capacity for a company and
  • it diversifies the company’s sources of funds so reducing its reliance on the banking sector.
  • companies can use it to raise cash as needed
  • security might not be needed

Non-Convertible Debentures

A Debenture is a type of debt instrument that is not secured by physical assets or collateral by the issuing financial institution. Debentures are the highest common form of long-term loans that can be taken by a company. These loans are repayable at a fixed rate of interest and fixed duration.

Debentures are of two types: convertible and non-convertible.

Convertible Debentures are the ones that can be converted into equity shares of the issuing company after a specific period of time. These types of bonds are attractive to investors owing to the ability to convert, however, they offer a lower interest rate.

Non-Convertible Debentures:

This financial product cannot be converted into equity shares and once the maturity period comes to an end, the principal amount along with accumulated interest is paid to the debenture holder.

NCDs are also of two types: secured and unsecured. Secured redeemable non-convertible debentures are backed by the assets of the debenture issuing company and if the company defaults in payment, the investor can liquidate the assets to claim the payment.

Benefits of Non-Convertible Debentures

It offers a high rate of return and though they cannot be converted into equity shares at a later point of time, they can be traded on stock exchange. So, if one wants to liquidate the debenture, one can do so and get back the money which is not the case with bank fixed deposit. This is why non-convertible debentures come across as a smart investment idea and of late, people have been investing in them in larger numbers.

Risks Involved in Non-Convertible Debentures

They do not give one any ownership in the company like shares. Also, they do not give favorable returns during a recession if one wants to sell them before the maturity period. Last but not the least, the returns on NCDs are taxable and the debenture holders have to pay taxes according to the income tax bracket in which they fall. This applies in the case of a pre-maturity period sale as well.

Steps E-Invoicing

If you don’t know your process, you probably don’t know key metrics like your First Time Match Rate. This means you won’t know the degree to which e-invoicing might help you (and you may have problems in your process which need other solutions, as well).

And, you probably don’t know the true cost of your invoicing process, and therefore will not be able to put together a water-tight business case.

Step One is likely to take you 3 to 6 months, but by the end of it you’ll be clearer and more realistic when you make your business case.

Importantly, knowing your cost-per-transaction is essential for negotiating effectively with the provider you end up signing.

Step Two: Know the vision of the company:

Process change makes sense to stakeholders when it is contextualized against the overarching ambitions of the company.

This means it’s worth taking the time to understand where the company wants to be in 6, 12 or 24 months’ time, and you can extrapolate that intention back to how e-invoicing might accelerate or bolster the realization of that goal. Take the time to lift yourself from the ‘day to day’ and understand where the company is headed. (Ask lots of questions, and really listen to the answers.) Then you can:

  1. Understand and communicate the wider purpose of e-invoicing and position e-invoicing as a key enabler for realizing goals
  2. Use the language of the senior management to present e-invoicing back to them
  3. Move e-invoicing up the priority list

This endeavor requires planning, and an investment of time outside your day job, but it will pay off down the road, when your CFO and CPO and CTO (Chief Treasury Officer) see e-invoicing as their single point of failure.

Step Three: Get procurement on board early

This is easier for an organization where Finance and Procurement are already aligned, already share reporting lines and objectives, and operate as one team.

But in organizations where this ‘joined-upness’ doesn’t exist, it’s common for Finance to own the project, because they get the more immediate gains, and involve Procurement almost as an afterthought. This can kill the project on the spot.

This is largely because e-invoicing is a supplier-focused program, and even though Finance, or rather Accounts Payable, pays suppliers, they are actually owned by Procurement. This means suppliers will listen to Procurement regarding the e-invoicing project first, and finance second. So if procurement are not brought in, or are at all dismissive of e-invoicing, your suppliers will feel this mood, and drag their heels in signing up.

This is perhaps the key to getting e-invoicing right, and so easily overlooked as a small detail. It’s not. It will make – or catastrophically break – your project.

When working with Procurement, consider the following:

  • Drivers – why are we doing e-invoicing?
  • Scope – all suppliers, invoice types, AP transaction types, countries?
  • Solution scope – just e-invoicing or an end to end solution?
  • Message – mandatory or optional?
  • Quality of the database – will the comms ‘land on the right desk’?
  • Signatory – how senior will the signatories be? The CPO and the CFO? (Ideally, yes.)
  • Targets – are Finance and Procurement KPI’d on the same targets?
  • The non-compliant – who will respond to the suppliers that resist?
  • Who will own the project? Perhaps Finance and Procurement together?

Investing time in seeking out a partnership from Procurement early on is fundamental to a successful project.

Step Four: Give the project a name

You will likely find that the nameless projects stay in project status for a long time, and rarely move to operational or ‘go live’. This is not a coincidence.

By giving your e-invoicing project both a pre- and post- contract name, you:

  1. Give it an identity which helps people ‘get it’
  2. Create interest and curiosity (‘what is this Globe project everyone’s talking about?’)
  3. Avoid confusion because you’re all talking about the same thing
  4. Heighten engagement and inspire greater emotional attachment, especially, I find, if you stay away from the obvious like Globe, Probe, e-Procurement Project – all decent names, but how about something more fun, like names of characters from movies or fiction? Or having a competition (with a really good prize) to come up with the most creative name?

Step Five: Know what you’re shopping for

What do you want? Is it a best-of-breed e-invoicing solution? Is it e-invoicing with dynamic discounting? Is it e-invoicing with workflow and routing, or an e-procurement functionality for your upstream procurement process? Do you need it to be VAT compliant and language sensitive because you are rolling out across multiple countries? And do you need to use their onboarding capabilities? (This is always advisable.)

Knowing what you want, and then capturing these requirements in a document is key.

You will have:

  • Commercial and business requirements
  • Process requirements
  • Scope requirements (impacting the legal treatment and the languages supported)
  • IT requirements (but these are probably weighted lightly, as all e-invoicing solutions I know of are system agnostic)
  • Resource or/and timing requirements

Then make sure that the companies you invite to respond to the RFP all offer similar-ish services, so you are not comparing one solution type against another completely different solution type in order to make a decision.

Step Six: Determine the cost of delayed-implementation

Quantifying the cost of doing nothing – ‘continuing as per’, and having this as a daily, weekly, monthly and annual figure, will help drive a deadline.

It’s advisable to build this figure with the main stakeholders, so they all agree on it, and understand that, allowing the project to slip by a month is actually costing the company X.

Having the daily figure will help drive the pace of the project.

Step Seven: Follow the best practices of the provider

The provider you end up selecting will have likely rolled out 20 – 100 e-invoicing programs (if it is one of the bigger providers like Tungsten, Ariba, Taulia or Tradeshift). This means you will be benefiting from their experience, which is now structured, and documented.

Construction Bonds Establishing

This step has mostly been taken to provide a certain kind of protection against a very severe kind of event taking place that can cause a certain kind of hindrance or failure in the completion of the project, the reason behind it being the insolvency of the builders or the inefficiency of the job to meet ends with the specifications of the contract.

Usually you will notice the existence of three kinds of parties in a construction bond, namely they are the party that has a hand behind the building of the project, the eventual owners and then finally you have the surety company that has got the back of the bond.

As for the types, this kind of bond contains three types; let us have a look at the list:

• THE BID BONDS

In situations where as the expected honor and respect for the bid by the principal which in this case might be the contractor is not met, this bid bond comes into the picture where it provides protection to the owner of the project. The obligee held under the existence of this bond in this case is the owner and he absolutely has the rights to sue the surety and the principal if he wills to in order to establish the enforcement of the bond. In case the principal refuses to extend any kind of honor to the concerned bid, then he takes the responsibility of being liable for any kind of additional costs that might surface.

• THE PERFORMANCE BONDS

This performance bond is used to provide a kind of assurance or rather guarantee by the contractor or the principal. This guarantee talks about the completion of the contract in full accordance with its respective terms. IF under any circumstances, the principal is seen to be facing defaults, the owner holds the right of calling upon the surety to ensure that the contract meets its completion. In that case, the surety will have no other choice but to hand over the contract to a new designated contractor.