As the year ends, many business owners begin to think about their end-of-year tax payments. It can be stressful, especially if you haven’t been keeping up with your bookkeeping and finances throughout the year. But there is a solution that can help alleviate some of that stress – factoring.
Factoring for Small Businesses
Factoring is a financial tool that allows businesses to get cash quickly by selling their accounts receivable to a third-party company, known as a factor. Essentially, the factor advances you a portion of the money owed to you by your customers and then collects on those invoices themselves. This can be an excellent option for businesses strapped for cash and needing to pay their taxes on time.
- Get Cash Fast – One of the main benefits of factoring is that it can provide you with cash quickly. You can get a portion of that money upfront instead of waiting for your customers to pay their invoices, which can take weeks or months. This can be especially helpful when paying your taxes, as the IRS typically expects payment in full by the end of the year.
- Improve Cash Flow – Another benefit of factoring is that it can help you improve your cash flow overall. By getting cash upfront for your invoices, you can use that money to pay your bills, invest in your business, or simply keep your cash reserves healthy. This can help you avoid cash flow problems, which can be especially important during slow seasons or economic downturns.
- Avoid High-Interest Loans – Factoring can be an excellent option for businesses with difficulty getting traditional financing. If you have poor credit or a limited financial history, getting a loan from a bank or other lender can be difficult. But factoring is based on the strength of your invoices, not your credit score or financial history. As long as your customers have a good track record of paying their bills, you should be able to qualify for factoring.
Factoring Facilitates On-Time Tax Payments
JOBE Services, Inc. in Humble, Texas, provides reliable, stress-free factoring for small businesses. One of the best times to use factoring is when tax payments are due. Skipping periodic tax payments or making them late incurs financial penalties that only increase your tax burden. Improving your cash flow using regular factoring or cashing in now on some outstanding invoices can help you make tax payments on time. With the right factoring strategy for your business, you can better manage your company’s finances and thrive in the coming years.
Contact JOBE Services, Inc. today to learn more about factoring. We can explain how it can help your business in different ways while safeguarding your company’s reputation and financial stability. Call (281) 540-7601 to speak with one of our team members today about your financial needs and how factoring can help.