What You Need to Know about the Emerging B2B Ecommerce Market

Some B2B companies already had ecommerce sites set up to serve their customers. However, with Covid-19 preventing most traditional in-person sales, even more B2B companies are adopting an ecommerce model that allows customers to order much in the same way as B2C consumers purchase items on sites like Amazon. According to Forbes, B2B ecommerce has become one of the fastest growing segments for both new and established companies. Forrester Research projects that B2B ecommerce will make up 17% of all B2B sales in the United States by 2023.

If you’re considering creating an ecommerce site for your company, there are a few things to consider. Making the move from a personal, face-to-face sales process to an online one can boost convenience, and works especially well for companies that need to connect with younger buyers, but it has its pitfalls too. Here is what you need to know about B2B ecommerce.

General benefits of moving to ecommerce

Larger customer base: Moving online allows you to access a much wider base of customers. So long as you can ship your product or offer your service in their area, you can reach them online. Ecommerce is a key tool to expand your business.

• Convenience for customers: Customers find ecommerce to be highly convenient. They can access the store at any time, see their past purchases to buy again more confidently, look through product specifications at their leisure, and use new payment options.
• Avoid credit card fees: The world of ecommerce provides access to other payment options that may charge you less in terms of fees than traditional credit card providers. Some of your customers may prefer to avoid using credit cards as well.
• Customer loyalty programs: It can be easier to implement a customer loyalty program through an ecommerce site. These programs provide their own benefits to you, like providing a wealth of customer data and intelligence.
• Competition: As ecommerce has not been adopted widely across all industries, it may be a great opportunity for you to get a leg up on the competition.

Potential issues when adopting ecommerce

Starting up an ecommerce site for your business can be rewarding but is expensive and also brings risk, like any business change. You can protect your business from these issues ahead of time if you consider them first.

One issue is meeting customer expectations. Delivery expectations for clients are higher when they are buying online. They compare the experience to consumer-facing ecommerce and expect quick shipping, fast updates on shipping progress and more.

Web development has its pitfalls as well. You’ll need a highly intuitive and functional website right from the start, or you could deter customers who have bad experiences using your website's new functionality. You’ll also need a platform that is secure to protect your customer’s information.

Creating a website that can meet these needs can be expensive. Invoice factoring can help you build up the cash reserves to afford a quality website right from the start, by giving you access to your revenue the moment you send out an invoice. Many businesses work with companies like J D Factors to fund their growth and development, too. With invoice factoring, the factoring company pays you what you invoice your customer, minus a fee, and collects from the customer on your behalf. In the meantime, you can use that cash to fund initiatives like developing an ecommerce website.

J D Factors offers factoring services that can help you grow your business with ecommerce solutions, or in other ways. Contact us today to learn more.

How Factoring Can Help Save Your Business from Financial Uncertainty

Managing cash flow always has its challenges, but during a pandemic it can be even more difficult. For most B2B businesses, instability creates unpredictable customer behaviour. Cancelled orders, delayed payments, and bankruptcies will all undermine your cashflow, and potentially even threaten your own business. Some small businesses are finding themselves negotiating with their larger customers who use Covid-19 as a reason to try to change payment terms.

If your cash flow has been a source of worry for the last few quarters, or you’re worried about the impact of even more lockdowns on your customers and their ability to pay, you should consider invoice factoring. Invoice factoring can help save your business from financial uncertainty, here’s how.

Cash in Your Hands

When you work with an invoice factoring company, you send your invoice out to the company. The factoring company pays you an agreed upon percentage of what you are owed, and then passes the invoice onto your customer. If you work with J D Factors, you’ll have payment for your invoice within 24 hours. That means that no matter how long it takes for your customers to pay, you’ll have the cash you need to:

• Buy more materials and inventory
• Pay your staff
• Pay your rent
• Invest in opportunities and innovative practices.

A strong cash flow is critical to keep running your business, which is critical during this financially difficult time.

Let Us Handle Collections

What happens when you have many more late payments than usual? Usually, you have to divert more of your resources, like money and staff time, to remind customers to pay. Stop chasing clients down! When you work with an invoice factoring company, you don’t need to waste your resources or threaten your relationships with your overdue clients. Leave all that headache to us. We will remind your customer to pay and if necessary, deal with collections, which can be an expensive process for you (and less so for us, because we have partnerships with outstanding collections agencies.)

Another benefit of having us handle the collections is that you won’t need to speak to your customers during the collection process, and they won't have the opportunity to bring up payment term changes with you.

Non-Recourse Factoring

Bankruptcy of your clients is a large risk in 2020, and likely will be moving into 2021. Forbes argues that more retailers are likely to go bankrupt in 2021, and other industries may be at risk too, especially as the Canadian government drops some of the protections it has offered businesses.

Bankrupt businesses do not have to bring your company down with them. J D Factors offers non-recourse factoring. That means if you have a customer who does not pay because they go bankrupt, we do not ask for the money we paid you for the invoice. You don’t have to return the funds, which means you can confidently use the money to run your business when you first receive it, even if you suspect that your client is in trouble. And, you don’t have to worry about absorbing the bad debt from a client’s bankruptcy, we will do that for you.

Non-recourse invoice factoring from J D Factors can help save your business during these financially difficult times. Reach out to us today to discuss how we can support you.

How to Reduce the Risk of Your Accounts Receivable

There’s always some risk to your accounts receivable. You’ve performed the work and sent your invoice, but will they pay you? Not always.  

Depending on the size of your contracts and how often your clients fail to pay, your business could face some serious liabilities. Some businesses even declare bankruptcy after taking on a string of bad clients.

There are ways to reduce the risk of your accounts receivable. Business owners may turn to accounts receivable insurance or non-recourse factoring to find compensation for those clients who can’t pay. Which option is better for you?

Accounts Receivable Insurance

For a premium, accounts receivable insurance offers you protection from damages you incur from unpaid invoices. If you have to hire a collection service your insurance policy may cover the cost. Or, if you have to take out a loan in order to make up the gap for an unpaid invoice, your policy may cover the interest on the loan. This insurance is also useful if a disaster or technological failure has caused you to lose track of your account receivable records causing you to be unable to collect.

Just like other insurance policies, your accounts receivable insurance will have a policy limit. If you have large invoices you may need to pay high premiums in order to get them covered. Further, your premium rates will go up if you need to use the insurance. There’s also the chance that the insurance company will find a reason to deny your claim.

Non-Recourse Factoring

Non-recourse factoring, on the other hand offers more benefits and less risks. How does factoring work? You send your invoices to the factoring company and they send you the cash, minus their fee. At J D Factors we send you the cash owed you within 24 hours. With us, you have your money without worrying about hiring a collections company or taking out a loan to cover your losses.

You’re paid, but what about your clients? The factoring company collects from your clients directly. With non-recourse factoring, if your client never pays because of a credit issue such a bankruptcy, the factoring company takes the loss for you. That’s much more convenient and easier to plan around than trying to make an insurance claim only after your client has refused to pay.

For this reason, non-recourse factoring helps businesses keep a healthy cash flow and a more flexible business model that is able to invest or expand when needed.

Benefits to Insurance Brokers

If you’re an insurance broker, why would you mention non-recourse factoring to your clients? Not all of the contacts you have will end up choosing accounts receivable insurance. However, you can still make money on these contacts for whom accounts receivable insurance isn’t a good fit. Simply refer them to J D Factors for non-recourse factoring. We’ll give you a referral fee. Plus, if you can offer your clients the solutions their business needs, you’ll earn their trust, they’ll stay with you for all their insurance needs, and they’ll refer you to their peers. Talk about a win-win-win!

Contact J D Factors today to learn how to reduce the risk of your account receivables with non-recourse factoring for yourself or a client.

4 Invoice Factoring Mistakes to Avoid at All Costs

Invoice factoring can be a useful tool to keep your cash flow healthy and your business growing. It’s often your best alternative to a bank loan or line of credit. However, invoice factoring isn’t something you want to jump into without fully examining how it will work for your business. Here are four invoice factoring mistakes you should avoid at all costs.

Mistake #1: Choosing Recourse Factoring When You Want Non-Recourse Factoring

Have you decided that factoring is best for you because you’re finding it challenging to collect from clients who are chronically late? Or, have you grown so fast that money is out the door before you get paid for previously completed projects? There is always a risk that some of your clients cannot pay, whether because of poor cash flow of their own or even bankruptcy. If so, who is responsible for the bad debt?

In recourse factoring, you’re responsible for bad debt regardless of the reason for nonpayment and you have to pay your factoring company back for the full invoice amount and any fees your customer refuses or can’t pay.

However, if you chose non-recourse factoring, the factoring company takes the hit if the reason for nonpayment is a credit issue, such as bankruptcy or if they’ve closed their doors, moved away, or have poor cash flow themselves.

Generally speaking, recourse factoring is best for companies who know and trust their customers, while non-recourse factoring is best for those who are new to the business and are looking to grow. However, choosing the right type of factoring for your business is not quite so cut and dry.

There are several myths out there about recourse versus non-recourse factoring which cause confusion, and it’s important to understand the differences between recourse and non-recourse factoring before making a decision about what’s best for you.

Some people think that with non-recourse factoring you’ll get lower advance rates or that it’s harder to qualify which is simply not true. Also, some people dismiss non-recourse factoring thinking that it’s unaffordable. While non-recourse factoring can be slightly more expensive because you’re paying for the additional protection, at
J D Factors we offer very competitive rates for non-recourse factoring.

Considering these facts, for most businesses, especially B2B companies, it makes sense to mitigate your risk of bad debt with non-recourse factoring, which provides peace of mind that you will be paid and able to pay your own obligations.

Mistake #2: Making a Price-Based Decision

A common mistake people make is choosing a factoring company based on price alone. It’s important that the factoring company knows and has experience in your industry. As well, ensure that they understand your needs, are flexible and have a simple termination policy. As you can see, when it comes to choosing a factoring company there’s a lot more to consider than price alone.

Mistake #3: Misunderstanding the Fees of Your Factoring Agreement

Factoring companies make money by taking an agreed upon percentage of each of your invoices. There may also be charges for other services you ask for. It’s important to understand how much these fees are. J D Factors stands alone with fully transparent pricing, with no hidden fees.

A factoring company may, for example, charge their fee on each invoice you send them, by only advancing a certain percentage of the invoice It’s best to understand the fees and schedules before you sign up.

Mistake 4: Accepting Payments from Clients Instead of Re-Directing

It’s important to ensure that your transfer to factoring is complete. You don’t want to be receiving money from your factoring company and your client, as you’ll end up paying much more or even losing your reserve amount. Instead send your customer’s payments to your factoring company immediately.

Or, partner with a factoring company like J D Factors that does all of the legwork for you and direct your customers right to them for payment. It is important for the lines of communication to always be open between you, your customer, and your factoring company. It may take a bit of time for your customers to adjust to this, but once they do it will be smooth sailing.

J D Factors is dedicated to helping you avoid the common pitfalls of switching over to factoring. We have experience guiding companies and their clients with our exceptional customer service and custom solutions. Reach out to us today to learn more.

A Good Problem to Have? Managing Hypergrowth

Finding that your business has surpassed your expectations, and is growing faster than you ever anticipated is as exciting as it is terrifying. Hypergrowth is something that all companies dream of, but few achieve, and when they do achieve it most CEOs quickly realize that huge growth can have some serious consequences. Managing your cash flow during your period of hypergrowth is fundamental to any start up, or rapidly expanding business.

Learn from the experience

Hypergrowth can be a make or break period for businesses, and for the individuals involved. In order to expand your business quickly, you need to have the cash available to support the growth, including hiring more staff and expanding office space and equipment to house and support your staff.

Aditya Agarwal joined Facebook when the company was still only 15 people strong, and stayed there until he became Director of Product Engineering just six years later. Agarwal’s own startup, Cove, was then snapped up by Dropbox and Agarwal went from 30 engineers to more than 200. No wonder Agarwal says that “most of what I’ve learned in my career has been during a period of hyper growth and change.” Managing your company through a period of hypergrowth can be incredibly stressful and difficult, but as long as you have the cash to support your growth, and commit yourself to learning from your successes and failures, the experience you gain will be invaluable.

Expect the unexpected

When Jiliene Helman, the CEO of Realty Mogul, raised $9 million of funding, the company went from 6 to 30 people in about three months. Helman knew that there would be some growing pains, but there was one issue that no one saw coming, “we didn’t anticipate how badly crippled our organization would be when the need for parking spots quintupled in just one week. Nobody could get into the office on time and our employees suffered numerous parking tickets.”

Don’t get so focussed on expanding that you miss the little things. Of course for Helman, the real issue wasn’t parking spaces, but integrating so many new people and new ideas into a company.

Find the right staff

From his time at Facebook and Dropbox, Agarwal says that during a period of hypergrowth you need people who are:

1)      Fast learners

2)      Comfortable with rapid change

3)      Able to improvise and handle ambiguity.

Hiring the right people to add to a growing business requires a budget that will allow you to hire from the top of the talent pool. According to Helman, “it’s not about just training an employee to do their job, but training the employee on how we expect our team to make decisions and the core values at the company.”

Be a CEO and a leader

Many companies that start small and then undergo a period of hypergrowth undergo a massive change of responsibilities for the CEO. In a small business a CEO might be expected to do everything, from sales, to coding, to marketing. A CEO’s job isn’t to work on the small details, in fact it is just the opposite. Focussing on the small details means that you aren’t leading your people or carving out a future path for your company – important jobs for a CEO.

Instead of doing every single task yourself you need to build a team, and internal processes that allow other people to do the work for you, to the standard that you would expect from yourself. This is a costly but critical venture for any company experiencing hypergrowth. According to Helman, “Once you’ve hired a team for all the roles you used to run yourself ragged trying to fill, you can focus on being a CEO.”

Agarwal advises that, to be a leader, you need to:

·       Scale outside of your own skillset

·       Accept that there will be setbacks and failures

·       Take opportunities to learn, don’t be afraid of new challenges

·       Don’t get emotional.

Enjoy it!

If your company is lucky enough to experience hypergrowth then remember, no matter how overwhelming it may seem at times, you are in a position that most companies can only dream of. Enjoy it and make the most of it!

At J D Factors we specialize in helping companies find the financial solutions needed to survive periods of hypergrowth. Contact me today for more information.

Studies Show Cash Flow a Leading Cause of Business Failure

According to the Canada Business Network, businesses enter and exit the marketplace each year. For example, Statistics Canada’s Entrepreneurship Indicators Database showed that the “total number of SME births was 78,430, compared with 83,240 deaths, which resulted in a net decrease of 4,810 businesses.”

Mismanagement, a subpar location, poor timing, bad products or services, lack of experience or just plain old bad luck can all contribute to a business closing down, but perhaps the most common reason is insufficient capital as a result of negative cash flow. The Canada Business Network provides a number of survival tips, suggesting that owners of SMEs “understand your business finances, such as cash flow and handling credit” to remain afloat.

What is cash flow?

Cash flow refers to the movement of funds into your business (in the form of revenue, investment or other sources), and the movement of funds out of your business (in the form of payments, bills, salary and other expenses). Cash flow is the lifeblood of your business and is necessary in order to keep everything moving smoothly and working properly. Without cash flow your business will not be able to support itself.

Positive and negative cash flow

When you have more money going into your business than going out of your business you have positive cash flow, when the reverse is true (i.e. that you have more money going out than coming in) you have negative cash flow.

Know your flow

Cash flow seems like a simple concept, yet it is one of the most common factors behind failed businesses. Even the best product, location, knowledge base, and sales team can’t save your business if your negative cash flow leads to insufficient capital.

Cash flow is more complex than just money in minus money out. You need to have a grasp of exactly where that money is coming from, where it is being spent, and just as importantly when.  Your company can have a net profit but a net negative cash flow for a given time period. For example, if you bought $100,000 of inventory, sold that inventory for $200,000 but have not yet received the payment you may have a $100,000 profit on paper, but a net negative cash flow of $100,000.

Even though your sales team may have done a tremendous job to sell $100,000 of inventory for $200,000 you might not be able buy more inventory for them to sell (or even pay them their salary) until you actually get paid!

Simple tips to help you get a handle on your cash flow

Getting to grips with your cash flow is vital to operating and growing your business. If you want to keep your business running smoothly and well poised for the future, follow these simple cash flow tips:

• Profits are not cash: You can’t pay suppliers or employees with profits, you need cold hard cash.

• Growth requires cash: Growing your business uses cash, which reduces your cash flow. If you want to grow you need to increase your cash flow.

• Don’t do it yourself: Making sense of your cash flow isn’t as simple as adding up cash in versus cash out. You need to ensure you know where and when that cash is going.  Don’t be afraid to call in professional help.

• Working capital is key: Working capital is the cash you have available to bridge the gap between making a sale and actually getting paid. Depending on your business this gap can be days, weeks or months.

At J D Factors our team specializes in helping small to medium sized businesses meet their ever-increasing cash flow demands so they can run their businesses successfully. Factoring, the process of turning your accounts receivable into cash, gives your company immediate access to working capital for things such as payroll, marketing, paying vendors, and purchasing equipment and inventory, without incurring debt. Contact me today for more information.

Ca$h now, worry NEVER!!!

What if I told you that you could grow your business by adding new customers and never have to worry about them paying?

The answer is simple. J D Factors, will credit guarantee all approved invoices eliminating ALL risk you may have dealing with customers you have no previous payment history with. We will deal with your customers that routinely pay late or take too long to pay. You are able to pick and choose what customers you want us to handle. Here’s the best part, if your customer doesn’t pay for your invoice you don’t have to worry about chasing them down for payment because J D Factors assumes all the RISK of non payment! We have already paid you for the invoice! We take the loss not you if a company goes bankrupt or closes their doors!

By using our programs you can offer your customers longer payment terms. This normally includes a spike in sales and market share increasing the profitability of your small business. Also by using our programs you will have more cash on hand for:

• Day to day expenses, as well as unexpected expenses.
• Taking advantage of purchase discounts for large orders by having cash on hand

Get cash for your business, without adding debt. Convert your assets into cash and never worry about being paid by customers again. Leave the work and worry to J D Factors and let us help grow your business.

If you are interested in learning more about our customized programs please reach out to me via email chernandez@jdfactors.comon twitter @cash_4_AR or directly 289-242-3178

I welcome any questions or concerns and your  feedback is appreciated.

Christian

"my customers really are the best... I think"

Small business owners would like to think that their customers are never going to leave them high and dry because of the relationships they develop and the comfort level they have with their customers. They  believe they will  always get paid and be able to deposit their hard earned cash without issue or delay because the customer would never "not pay them".

However a lot of business owners ignore the warning signs of trouble from their customers such as slowed payments, ignoring and or not returning collection calls. These warning signs are sometimes ignored because they are friends, some because of a long standing relationship. While other business owners simply can't afford to put collection pressure and risk  loosing  a key account while holding on to the hope and belief that they will not be taken advantage of.

No business owner ever enters a business relationship  thinking that they will not be paid. This however is happening  more often then not in this current economic environment. Even if you take the steps to check credit references or take a down payment you are still  not guaranteed to be paid. It only takes one bad credit decision or one bad debt to sink the ship and put your small business in jeopardy.

If only there was a way someone could guarantee that you will  be paid for your goods and/or services eliminating all future bad debts forever. Luckily for small business owners there is.

Using JD Factors  non recourse factoring programs allows you the peace of mind that you will never have a bad debt again. JD Factors will not only provide you with working capital, it will provide you with the security and the peace of mind required to fully concentrate on growing your small business.

I welcome all  questions and comments. If you would like to protect your businesses from future bad debts, please contact me to learn more.

Christian Hernandez

289-242-3178

chernandez@jdfactors.com

Customers taking to long to pay? I CAN HELP

Part of growing your business, means adding new customers. Sometime those new customers don't pay the way we would hope. Their slow payments trends have a direct impact on your business. Time spent sourcing more new business or time spent on improving your own processes goes out the window, as you have to take time out of your busy schedule to make collections calls and chase your customers for money.  NOT ANY MORE!!

JD Factors, has the answer you have been looking for. Not only will we pre vet your customers to make sure you are doing business with good companies that will pay.  JD Factors will take all the CREDIT RISK, meaning if your customers never pay we will take the loss not you. We will pay you once the service is completed, and collect on your behalf, thus resulting in a few things. Most importantly you will have CASH on hand for your operating expenses, pay down debt or use it to grow and expand your business.

Let me know if I can help grow your business with strong positive CASH FLOW!

I can be reached, via email chernandez@jdfactors.com, or toll free 800-263-0664 x220