What is Sales Financing?

Running a business is a difficult process and one which is constantly fraught with unexpected financial difficulties. Balancing acts are constantly required to ensure there is enough money in the business coffers to cover wages, rent, tax and other regular bills, as well as stock and equipment purchasing.

For all businesses, one of the key factors of success involves ensuring the quick release of funds in order to enable further purchasing or investment decisions. If funds are tied up rather than available for use, then the entire business process can screech to a halt.

One of the most common problems in business usually occurs when large sales are successfully made and the work is invoiced to the client, but payment is not immediately forthcoming. This means that there is a lot of cash tied up in sales ledgers which are not available for use on other projects such as restocking. This is an all too common situation which can prove disastrous to many companies – especially smaller businesses and start-ups who are usually the least able to effectively deal with these types of situations due to generally low levels of liquid assets in the first place.

This has lead to the creation of a number of business and sales financing products by larger institutions and specialist business finance organizations to fill the gap in corporate finance. These days, many banks can provide business banking services such as factoring, invoice discounting, and stock finance to enable their clients to free up many of the assets that they normally have access to for working capital.

Sourcing a financial institution to deal with the recovery of funds tied up with stock or invoices and to help deal with sales ledgers can enhance a business on several fronts. Not only does the company not have to worry about chasing up debtors, but the money is quickly made available for reinvestment; and the risks of suffering from bad debt are significantly lowered, as it can become the province of the factoring company to pursue reticent debtors. Factoring companies will often also make available additional debt recovery litigation services if they should become required.

While some businesses may see the costs of using sales finance services as cutting into profit margins, the benefits of having funds made accessible for use towards working capital – rather than sitting with inaccessible funds which do not for the company – can prove to be invaluable in enabling company growth and stability.



Source by Michael Hanna

Why Pursue a Career in Finance?

In the olden days a career in finance did not offer anything more than a back-office recording keeping job. A finance person was understood to be a record-keeping person in an organization.

However, with the evolution of business landscape, the role of finance has evolved and become more challenging. In today’s organization a finance person occupies a much broader role involving decision-making, planning, controlling the financial operation of a business.

Within finance, one can find a variety of job roles that are not limited to just the accounting field. You can explore financial career options in various industries such as financial service, financial planning, fund management, regulatory compliance, trading, financial management, and so on.

These different jobs require you to have completely different skill sets, and you can choose a financial career that suits your personality and skill level.

If you are analytically oriented, you can choose a career in risk management, where your job is to measure and manage the risk faced by a bank or a financial institution. Alternatively you can also join the insurance industry as an actuary where you ass the risk of loss, and design and price new insurance products. These jobs require number crunching skills. You are also expected to be very diligent as a small mistake can turn into big losses.

On the other hand, if you are a very outgoing person and like meeting people, you may be better suited for selling financial instruments. You may want to join a bank or an insurance company, and promote their financial products to prospective customers. In a bank, you are expected to sell their financial products such as deposit accounts, credit cards, personal loans, home loans, etc. For a career in sales, most organizations provide you a thorough training on their products and common techniques for selling. You are expected to be a go-getter with the ability to close deals quickly. In most financial services institutions, you are paid a decent salary and a commission, which is based on your sales targets.

One more lucrative career option is in trading. As a trader you use your employer or client’s funds to trade in financial products such as equity, bonds, currencies and currencies in an attempt to make a profit. Traders study the financial markets and identify opportunities to make profit. This is a high stress job and requires you to have strong analytical skills and a tough attitude. A career in trading also offers good salaries with bonuses and incentives linked to your performance.

While these are a few important career options available in finance, a person interested in this field can choose from a much wider array of job roles. Best of luck with your financial career!



Source by Sam Pearson