Asset-Based Lending For 2017 And Beyond

Asset Based Lending – The Preferred Solution
Despite the industry’s sometimes negative reputation, Asset Based Lending can be a preferred solution for borrowers who put in the effort to find the “right” lender, with appropriate collateral and loan structure.

The primary difference between Asset Based Lending and Commercial Bank Financing is what the lender looks to first for repayment of a loan. An ABL lender looks to collateral. Banks look for collateral and covenants.

As access to capital had become increasingly restricted for middle-market companies, many businesses seeking liquidity have begun to see alternative financing solutions, like those offered by online asset-based lenders.

Pre 2010 there was little innovation in ABL; banks continued to offer formulaic, cookie-cutter products that did not accommodate companies with unusual characteristics, seasonal attributes, or atypical business cycles. ABL lenders became known as “lenders of last resort,” and the industry was often associated with failing companies and bankruptcy.

Positive: Asset-based loans can be a much-needed source of capital for companies that are rapidly growing, highly leveraged, in the midst of a turnaround or undercapitalized. Sometimes a company simply needs that infusion of cash to get over a financial hump or prevent growth from stalling out.

Lenders who provide ABL credit facilities will work closely with the borrower, working and monitoring the collateral with the client when challenges arise. Clients will frequently attest to the flexibility offered by their lenders.

ABL often comes under fire from critics who claim these loans drive borrowers to default, but it can be a useful tool. ABL provides liquidity to both distressed companies undergoing a turnaround process and growing companies looking to expand. It’s more expensive than traditional borrowing, but generally an Asset Based Lending arrangement gives the borrower access to the lender’s expertise – which some mid-market businesses find to be worth the steep price tag, even if they have a number of borrowing options.

A vast majority of those same small business leaders, nearly 80%, indicated that one of the biggest impediments they face in creating new jobs is lack of access to capital. One sector of the financial services industry that did not restrict the flow of capital to businesses during the downturn, and continues to lend to businesses today, is the asset-based lending and factoring industries.

Negative: The chances of securing a credit line are only as good as the quality of the receivables. Commercial lenders will sort through your customers to identify the ones that pay in less than 60 days or have a strong credit rating. They may not deem sales to individuals or small businesses as “eligible receivables.”

Asset-based lenders can often provide more liquidity than traditional lenders by using the value of the collateral. ABL typically has fewer covenants surrounding financial performance, which can give the borrower more flexibility in operating its business. And Collateral Based loans can be tailored to meet a company’s specific needs, such as providing increased seasonal advances to help the borrower through a low selling season.

Communication Is Crucial
To determine a prospective lender’s approach to communication, a borrower’s management team needs to spend as much time as possible with the lender, ideally at its office. They should understand the process by which the lender makes decisions, and should get to know as many of the lender’s decision-makers as they can – not just the underwriters, but also the people who make credit decisions after the loan is executed, as these will be their day-to-day contacts. These relationships will help them better understand the lender’s culture and how it operates.

Asset Based Lending lacked innovation in the past, leaders in the sector have begun to evolve in their approach to asset-based loans. Borrowers can distinguish forward-thinking lenders from the old guard by looking at whether prospective lenders value open, two-way communication. Borrowers should look for a lender that truly views the lending relationship as a partnership in which both parties are responsible for maintaining transparency and clarity about their objectives.

Structure Matters
One topic that a borrower should discuss with the lender before entering into an Asset Based Lending agreement is the structure of the ABL facility – and the borrower’s management team needs to read all the paperwork.

While traditional ABL is rather commoditized, some elements of the loan’s structure may be critical to the success of the partnership.

Lending on Collateral, Not Covenants
Alternative lenders often have a different approach toward covenants than do traditional lenders, whose covenants are primarily focused on the balance sheet and financial performance. While asset-based lenders may also consider performance-based metrics, they are much more concerned with collateral and liquidity covenants.

Covenants are useful for driving dialogue between borrower and lender, but they shouldn’t be the only driver. At the end of the day, an asset-based lender should focus on the borrower’s collateral and leading performance indicators rather than on financial covenants that may be restrictive or too rigid.

Along the same lines, the borrower’s management team must understand, before entering an agreement, the degree to which the lender is willing to work with them through the flows and ebbs of their business cycle. The purpose of any covenant should be to act as a trigger so that when the borrower reaches a certain point, management must take a “time out” for a dialogue in which the lender can ask key questions and determine next steps.

Asset Based Lending vs Equity Partner
Often, the relevant comparison for the borrower is not ABL lender versus traditional bank, but rather ABL lender versus equity investor.

Thus, when selecting a lender, the borrower needs to pay close attention to the service, flexibility, and responsiveness of its prospective partners, as well as the access borrowers have to decision-makers within the lending organization. An innovative, forward-thinking approach to the lender-borrower relationship can complete the value equation and make ABL’s price worth paying.

Sip Calculator Magnetizing The Investors Towards Online Investing

Online investing option has reached to a higher level with the introduction of SIP calculator. Making the calculation of SIP amount easy, the tool is handy to use as well. Let us understand the concept of SIP calculator with a story. There were two friends Yash and Rohan. Both had passed out college and were placed in MNCs. With the commencement of their career, they took a resolution of initiating their investment also. Yash was very trendy, and new technologies magnetized him. On the contrary, Rohan was simple and was not much of a techie. As both of them decided to invest, Yash did all the research online and also prompted Rohan to take up the online investment method. But, as for Rohan, it was not his area of expertise. So, Rohan relied on the mutual fund agent, and Yash went for online investing. When it came to deciding the amount to invest as SIP monthly both were confused. Yash took the help of an SIP calculator, and Rohan trusted the agent. But, the outcome was that Yash got the exact amount required for investment and the agent failed to calculate the precise amount and thus took an approx figure. Thus, for the same scheme Yash paid the correct amount that was required and Rohan had to pay a little more due to the inaccuracy of calculations.

The story signifies the importance of SIP calculator in the investing process, because the amount of SIP decides the corpus (the main aim of investing). Especially in the online investing the role of an SIP calculator is of vital importance. The investor advances towards being free in order to make the optimal use of their money. SIP calculator acts as a catalyst in aggravating the process investment through proper channel.

Features of an SIP calculator:-

There are a lot of features which motivates an online investor to use SIP calculator. A few amongst them are stated below:

Easy to use:

SIP calculator is an easy tool to operate on. The user-friendly approach is the striking feature of the tool. Providing an environment of smooth functioning and quick calculations, an SIP calculator in India is making online investments attain new heights with each passing day. The main reason of the increasing inclination towards online investment is the handy tool (SIP calculator), which ease out the complex calculations manifolds.

Using CAGR:

SIP calculator uses the formula of CAGR (Compound Annual Growth Rate) to calculate the returns. CAGR is the most widely accepted concept for the growth calculation of investment over a period extending one year. The calculation of CAGR is very complex and not beyond the grasping power of non-financial people. It is a mind wrecking concept and takes time to understand. But you need not worry. The CAGR calculation is simplified with the help of SIP return calculator. Paving the way for quick and easy calculations, SIP return calculator has become a defining point of online investment.

Targeting accuracy:

The goal of an SIP calculator is to provide results that are 100% accurate. But, it works on the inputs that are fed to it. Any mistake in the input data leads to an erroneous result. Otherwise, the result shows the exact and accurate outcome without the mistake of a decimal place. A perfection of that level is surely a strong feature of SIP return calculator.

The Benefits Of Trading The Commodity Market

Like trading in the Stock market, trading in the commodity market is also very interesting. While one trades on the basis of Stock Cash Tips in the stock market, the trader can trade on the basis of commodity tips in the commodity market. ProfitAim Research is one such advisory firm, which provide both the best Stock Cash tips as well as commodity tips to the traders.
Commodity market seems to be a lucrative avenue to a lot of traders and Investors. In the Commodity market various commodities are traded and one can take benefit of the price fluctuations to trade effectively in the commodity market. Various commodities are listed on the Commodity exchange and the relative prices of various commodities are traded on the exchange. There are various benefits of the Commodity trading like a trader can make huge profits by trying to forecast the Commodity signals. The most important part of the Commodity trading is to anticipate the Commodity trading signals.
Scalping: Intraday Trading Strategy For Commodity Market
One of the important benefits of the Commodity market is that the trader can form a strategy and trade on the basis of it. The Intraday strategies like First hour strategy or scalping techniques can be followed to earn good profits from the trades. Scalping is a technique to look at the price range during the first hour of trade and then look for a breakout from this range. Thus, if the prices break from the high it’s a buy call and a rise in the prices is anticipated. On the other hand, if a breakout from the lower limit of range is observed a down trend is anticipated. Thus, scalping is an important strategy in achieving good profits from the Commodity markets.
Also, there are other strategies available like trading for small profits. In this case small changes in the Commodity signals are generally traded for the profits. Also, a large number of trades are executed to add up to large profits, this will be applicable in Stock cash tips as well. The Commodity trading signals are unassuming but still with a proper plan and a proper strategy good profits can be made through Commodity markets. The trader can also base their trade based on the advice from the advisory firms who provide free Commodity signals initially and then charge a nominal amount for their services. Thus, the Commodity trading is beneficial if done with proper planning and strategy.
Trading based on the Charts
Trading in the stock or commodity market is an art difficult to master. People use various methods and strategies to trade in the stock markets. Trading based on the charts is one of the ways out of them. Various types of charts exist like Candle Stick charts and line charts. These charts can be plotted with varying time scale. The price movement depicted by chart can be an important way of forecasting future prices.
Thus, one can trade on the basis of charts and by applying suitable indicators of the technical analysis, one can anticipate the price movement. Trading on the basis of intraday Stock Cash Tips is the other way of trading.

Top 5 Benefits Annuities Can Bring Except The Lifetime Income

Earning a consistent income in their retirement life is a major concern for the seniors approaching their retirement and many of them invest in different annuity insurance plans. These annuities help the insured to receive a guaranteed income for life protects from the fear of outliving their savings. Also, if a senior couple hasn’t saved enough or doesn’t have someone to support after their retirement, these policies help greatly to take care of their daily expenses and maintain a better lifestyle. However, the majority of seniors isn’t aware of all the benefits an annuity can bring. Most of them buy an annuity solely to receive a guaranteed income in their retirement life but the annuities have a lot to offer. Here, we are going to explain five more benefits of a retirement annuity plan that you might not be knowing.

Benefit to your loved ones

At times, seniors pay a long series of premiums to earn them back during their retirement but die at an early age without receiving the complete benefits. Many seniors die soon after their retirement and insurance providers keep their share of investment with themselves. But, the new additional feature allows transferring the benefits to the beneficiaries, if the insured dies early. Along with the immediate annuity plan, you can choose a guaranteed period of 10-20 years that are calculated since the time you start receiving the payments. If you opt for a 20-year guaranteed period with the annuities, your insurer will provide a series of payments for exact 20 years. You can name your spouse or kids as the beneficiary and they will receive the benefits for rest of the period, in case you die early.

Tax deferral on earnings

Most of the investments are applicable for state and federal taxes, but the investments such as interests, annuities, dividends and capital gains earn a tax-deferred status. These investments are tax-free until you withdraw the accumulated amount. The tax-deferral is similar to 401(k)s and IRAs, but there isn’t any limit on the amount and you can put any amount into the annuities that you assume enough to spend your retirement comfortably. Moreover, the minimum withdrawal criteria have more flexibility than that of to 401(k)s and IRAs.

Tax-free investment transfers

Market performs differently at a different time and an investment performing strong today may perform poorly after a certain period. Hence, investors keep transferring their investment amount form one to another fund and there are financial advisors to help with the same. Usually, these investment transfers or rebalancing are applicable for taxes but the annuity retirement plan has no such tax consequences. That means, you can rebalance your investments as per your financial advisor’s suggestion and you won’t have to pay any taxes on that.

Protection from lenders

People take different types of loans to match a better lifestyle and pay the due amount in installments. At times, people reach a stage where they only have the money enough to take care of their fundamental requirements and aren’t able to pay the loan installments. In such cases, if the lender files a lawsuit, they may lose the return on the investments made. Annuities insurance policies also help protect your investment return even if you can’t make the installments. Usually, the premiums you have made to your insurance provider, belongs to them and there are laws that restrict that money to be accessed by the lenders.

Variety of investment options

Insurers help the investors with a range of annuity options at retirement including the fixed and variable one. The first one credits a certain rate of interest on the amount you deposit while with the later, your money is invested in the stock or bonds like mutual funds and provide a return based on the market performance. Also, various insurance providers have introduced different types of floors that set a limit by which your investment value may not fall further. That means, if you have invested in a variable annuity, you return won’t fall below a certain value, despite the fluctuations in the market.

Does Social Media Help In Getting An Auto Loan?

We live in a world dominated by technology and social media. Whether they are your shared posts, status or your connections, social media platforms play a key role in carving your virtual personality. A well-known fact is that technology is an inevitable yet an integral part of our lives. When it comes to financing your car, social media is building its way and becoming a relevant medium of profiling. For instance, John walked into a dealership to purchase and obtain financing for a car. The quickest and easiest way to search for a tentative background of John would be to get a grasp of his personality on the basis of his behavior on Facebook and Twitter account, respectively. Currently, a small percentage of lenders use social media for judging an individual’s creditworthiness. However, the developing presence of social media is gaining mind share of the lenders.

Can Social Media help in ascertaining the Creditworthiness of an individual?

1) Facebook can build your Credit Circle

The very essence of Facebook lies in networking. A creditworthy profile does not require millions of posts or many friends. However, if you have a genuine profile and do not pose any abnormal social behavior, your profile is likely to get approved for an auto loan. Additionally, the presence of certain contacts in your friend list with a clean history and a strong credit score further add to your creditworthiness. Lenders can look for mutual contacts that have been previous customers. The payment history of the mutual contact can then be used as a basis to judge your creditworthiness. In order to get the most out of your circle, seek a person with a good credit score and make him a cosigner and your auto loan process will become smooth.

2) With LinkedIn, lenders can check your Employment Stability

A stable employment speaks volumes about your personality and trustworthiness. LinkedIn can serve as the best source of obtaining information regarding your job history, duration, professional position and interests. The documentation of an auto loan requires you to display evidence of a source of income through pay stubs. However, there is less proof one can gather regarding the stability of employment. Social media can become a tool to ascertain not only if there is job-hopping, but also the financial strength of the individual. A person with a 500+ connections, long duration of employment history and a considerable profile activity can become a favorable applicant in the eyes of the lender.

Buying a Car: Making the Most of your Social Media Profile

Social media has made its way into the minds of auto buyers as well as lenders. As primary sources of guides, nothing comes above your credit score, current income status and payment history. However, virtual platforms such as Facebook and LinkedIn are starting to occupy mind share in terms of creditworthiness. Once the primary sources of information seem insufficient, lenders may turn to social media to get an idea of your personality. A few helpful ways to make sure your social media positively adds to your credit score is to be careful with your online posts, invite only genuine friends into your virtual circle and to always keep your professional profiles updated.

How to Make Sure Your Business Survives in 2017

According to RSA, the commercial insurance company, 71 percent of the UK’s small and mid-sized businesses expect their revenues to either fall or be flat in 2017. The health of any business is not guaranteed forever. At some point, virtually every small and mid-sized business hits troubled waters so this could be a difficult 12 months if you own a small business.

It’s not easy spotting the early signs of trouble. Turning around the fortunes of a distressed business is a formidable task, but if you are concerned, you need to jump on it right away. Treat it like a crisis because without that kind of mindset it’s hard to bring yourself to take significant action straightaway But the good news is that if you act swiftly and decisively, it is possible to recover and bounce back stronger than before.

You need to start 2017 by taking a cold, hard look at your business. Get some outside help because it’s always useful to have an outsider’s perspective. An experienced business consultant can help you to see what needs to be done, make the tough decisions and execute a plan.

Here are the 7 areas that you should be looking at and the questions that you should be asking in order to secure the viability of your business in the year ahead.

1. Strategy. Re-evaluate whether your business is still relevant and focused. What makes your business stand out from your competition? Revisit your marketing strategy because the majority of business ideas fail, not because of a bad idea, but because of bad marketing. Make sure you know how your customers are reacting to your messages.

2. People. Do you have the right people running and operating your business? If not, get rid of the ones who are not performing. To survive, you need “the right people on the bus”. Are the employees who are the right ones properly recompensed and incentivised?

3. Products and services. Are you sure that your clients are satisfied with your offerings?

4. Customers. Is your business focussed on profitable customers? Or are you focusing too much on unprofitable or difficult customers? Where are your customers right now in terms of their mind and mood? For example, are they upbeat or pessimistic, are they cutting back and how are they spending their money right now?

5. Innovation. Are you always improving? For example, are you being creative or using technology to create better products, reduce costs and improve competitive advantages?

6. Performance. Is the business goal orientated? Are your processes and procedures efficient and systemised?

7. Finances. Is your cash flow in a healthy position? Do you have too much debt? Are your gross margins and pricing optimised? Is your sales team effective?

So resolve now to commit to doing all you can to make sure your business survives what could be a difficult year ahead. Be prepared to look closely at what is happening in your business and to make the tough decisions which may be necessary.

5 Best Things to Do for Your Success in 2017

Reasearch shows that 92% of people set new year resolutions and goals year after year (whether this is weight loss or landing a job or getting a degree) but few of us really follow through and take action to achieve those goals. So what is it about setting new year resolutions? Is it just excitement or do we really intend to achieve our goals in the new year but get distracted by life commitments. In this article I share 5 things that will help you follow through on your new year goals and resolutions.

1. Have a higher personal standards

The quote by Norma Vincent Peale proves to be true when it comes to success, “aim for the moon, even if you miss you will land amongst the stars”. To be successful you need to have higher standards. As you reflect on 2016 improve your life standards going to 2017. Improve standards in every area of your life career, finances, relationships and spiritual growth. Aim to do better to achieve more.

Realise that in order to improve your standards you also have to have the right self-image. It is not easy to aim high when you feel lousy about yourself and feel like you do not deserve to be successful. So, try to let go of all past negative experiences that might have made you doubt yourself. Go to 2016 with a new personal slogan that says, “I am worth it, I deserve all the success”

2. Define your success in a way that speaks to you.

Some of us are programmed by society when it comes to success. We see people doing well financially and living luxurious lifestyles and define success in their terms not our terms. It’s OK to admire others however the problem with this approach is that defining success in terms of what you see around you might not give you the drive that you need to succeed. This has happened in my own life. For a while I have been impressed with entrepreneurship. I saw some of my friends who were entrepreneurs doing really well in business and living lavish lifestyles. And so, I started thinking that I need to start my own business too because I was seeing my friends and they were doing really well. I registered a business and started looking for opportunities. But somehow I just did not have the right energy for it. I couldn’t figure it out. I just wasn’t motivated to work hard on the business.

Until one day as I was taking a long drive (solitary long drives do help you have self introspection), as I was thinking I figured it out that I actually defined success in a wrong way. This was the reason I was not motivated on my goal to become an entrepreneurial success.

I had defined success in terms of money because I saw my friends. The problem was that money is important to me but it doesn’t motivate me. That’s why I couldn’t take inspired action on my entrepreneurial goal. I had to figure out a way to define success that is authentic to me. This would make my goals exciting and motivate me to work hard. I had to find my own purpose and not just want business because of what I was seeing from my friends.

Business success to me means creating value for others and making a real difference in people’s lives. Once I had this definition, my purpose connected much better to my business and I really started working hard and engaging.

There are many cases where you might kinda of want certain things because they are perceived by others as important. However, you might find that whatever perception others have is not what speaks to you.

Define success in a way that speaks to you and your true passion and aspirations. You will no longer have to drag yourself to working hard towards your goals because when your goals speak to your heart you get automatically motivated to pursue them.

3. Set goals

Imagine tow people having to sell bananas on the street, as is the case with many open market street sellers in Africa. One has a daily target of selling 30 bananas. The other just goes with the flow and has no target at all. Who of these two people do you think will do better at selling bananas considering that selling on the street is not easy. I think the person with the target will do better and they can be able to adjust. If they had started at 8 am and sold 25 bananas by 3:30 before knocking off at 16:00 they can push hard for just 5 more sales to reach their target – because when you quantify your target you always try to hit. On the other hand the person with no target has nothing to measure themselves against. They might not be even motivated to push for more sales.

Setting goals is important because it engages our minds and help us push harder to achieve our goals. Once you have a number relating to the goal that you are working towards, it is more likely that you will push harder to achieve it.

4. Act on your goals and receive feedback

It goes without saying that nothing happens by itself. You have to take action and exert energy to achieve your goals. Taking action requires discipline and sometimes we have to act even if we do not feel like doing so. The best way to get things done is now. There is always something you can do to act on your goals immediately. Here is an exercise… take a piece of paper, write your goals in on it at the front page. Turn the page around and write what you can do immediately to achieve those goals. Act!

5. Reconnect to your goals constantly

Life does get busy. There are constant calls, emails and people to attend to. it is possible to disconnect to your goals and only re-look at them towards the end of the year.

Time occasionally feels like it passes by quickly and you might feel like you have not progressed. You need to develop a routine to reconnect to your goals constantly.

The best way is to have solitary moments as a ritual where you reflect on your life. This can be an activity where you take a walk every once in a while or run or just meditate. Whatever the activity is ensure that you do it alone. As you reflect on your life ask yourself these three important questions, “How am I doing towards achieving my goals?”, “Am I still heading towards the right direction”, “What do I need to improve on?”, “What do I commit to do immediately in order to achieve my goals?”

This will help you constantly reconnect to your goals and not get distracted from achieving them.

Finance Transformation: Key Facts To Compare Your Operation

1. Employee Costs

I have been amazed by the strength of the business cases for the F&A outsourcing deals I’ve led over the last few years. A number of things have happened to make them look so good.

First, the suppliers have really got their acts into gear. They provide clear, all inclusive pricing that makes a comparison very clear.

The market is not fully comfortable with transaction based pricing, but that is as much the issue of the Buyers as the Supplier. At an FTE/employee basis, the comparison is a lot easier for everyone, given the level of data required to price at a transaction level.

Second, what has happened on the Buyer side of things is that Shared Service Centers have experienced wage creep over the years, sometimes adding 1-2 layers of operation. Most Shared Service Centers have countered this in part by improved productivity, but this has not matched the similar gains made by the outsourcers.

Combined, these facts make the business case strong for most F&A outsourcing projects.

Key Fact 1. The average, fully laden cost of an outsourced finance team member is $34,000/£22,000 per year. This is the fully loaded cost, of staff who are fully trained, including all overheads and leadership costs.

From any Shared Service Centre I’ve seen in the US, UK and Europe, those are pretty much entry level salaries, regardless of all the additional employment taxes, operating costs, and management costs attached to every position.

These numbers translate into a very strong business case, and it is the main reason why CFOs push for a deeper investigation.

2. Amounts At Risk

Is your Shared Services Operation willing to risk its own money to underwrite delivery levels? Away from financially-based business cases, this is the most under-valued differentiator between an internal delivery model and an outsourced delivery model.

I have not yet seen an internal delivery model that creates any alternative to this. Yes, I’ve seen bonuses unpaid due to performance issues, but nothing that repays the business for failings that have impacted their own performance.

The chasm between the Internal and External model is only going to widen further as the Outsource Suppliers choose to adopt targets for business-critical areas such as Days Sales Outstanding. Failure there has a lot greater impact than in something like Customer Support, but it is an area that the Suppliers are stepping up to the mark on.

Key Fact 2. On a monthly basis, will the Shared Service team offer, from their own funds, rebates to the business of up to 15% of the cost of the services they deliver? While the exact amount at risk will vary between suppliers, they will offer significant discounts where service levels are not met. It is essential to note that a well constructed contract will lead to constantly improving service levels, so the bar will be raised quarterly, if not monthly.

3. The Cost Of Transformation

For many years, the outsourcers played a cost-only card. Regardless of whether the delivery was onshore or offshore, it was relatively easy to offer lower costs than most internal organizations. Come 2012 (and probably since 2010) the value proposition has moved on significantly.

Now the Suppliers come with a toolset – technology, people, and methodology – that drives “Big T” Transformation and “Little t” transformation. “Little t” brings the day-to-day change; “Big T” brings the headline-grabbing changes. Often this gives access to changes that were unlikely to be funded in any other way.

As an example, the biggest area of opportunity is in leveraging the Supplier’s investment in technology. One client had recently expected to invest a minimum of $500,000 to implement a automated reconciliation tool. Getting approval for that spend had taken almost 12 months, and was high on the list of programs that was likely to be cut from the Investment Plan. So delivering it at all was highly unlikely.

The deal that they were able to strike with the Supplier delivered their operational tools and also embedded it in the pricing, removing the road-bump that was preventing access to the improved, automated process.

To be honest, some of the home-built technology are not the prettiest of things, but they come at a price and an operational improvement that will make you focus on the value they drive, not how they look. Other suppliers, however, have bought third party technology companies that come with world class technologies that will be as good as or better than the ERP competitors.

Key Fact 3. You can work to build an outsourcing deal and delivery model that cuts the investment that you have to make to address key, process-improving projects.

Key Fact 3a. Please note – I always emphasise to clients that they still need to invest in their service going forward. It is a myth that all investment goes away, but you can certainly be creative in how to get the best service quality and a pricing structure that helps the Buyer and Supplier.

4. “Flash To Bang”

When referring to Flash to Bang” I mean the time between taking the decision to move to a new delivery model and reaching optimum delivery and efficiency levels in the chosen model.

One of the “Lost Costs” that we dwell on in projects is the time difference between a “build yourself” option and a “buy it in” option. Like most things that we choose to do ourselves, timescales are more fluid than those that are commercially underwritten. Having an outside party responsible for delivery does not guarantee success and we can all share horror stories about projects that have gone wrong. However, the penalties attached to failure are a lot more transparent when external parties are involved.

Where the greatest impact is felt is in the time it takes to reach optimum delivery/efficiency levels. As an example look at a greenfield environment, where nothing has been centralized. Given a standing start, an internal Shared Services Center will take around 6 months longer just to be established. At that stage the Outsourced model will have been operating at full efficiency levels for 6 months. There is a clear opportunity cost within that.

Key Fact 4. Commercially contracted projects are 75% more likely to deliver on time, and nearly 100% of them are promised to be delivered sooner than any internal, equivalent project. The financial impact of this is hard to generalize about, but having a project completed sooner, leads to benefits earlier.

5. Staff Skills – what percentage of your staff are Six Sigma Trained?

The growth of Six Sigma training within the workplace has been impressive over the last 10 years. For many organizations there will be some staff with these skills, though further investment is always dependent upon the budget being available. The question – and the opportunity – is what percentage of your staff have this kind of training. More prescient, it is also worth asking how frequently their skills are drawn on.

One of the revelations of site visits to the Outsourcers is the sheer passion that the delivery teams bring to every client. The prospective clients who take floor walks of existing operations always comment on the drive, engagement, and hard, proven business improvement case studies that are discussed on the tours.

Really what the outsourcers are doing is encouraging their staff to cut their customers’ costs. While that will lead to short term revenue losses to the Outsourcer, they bank on the fact that it will lead to even more work in the future. From most deals I’ve seen this is exactly what has resulted.

Key Fact 5. For most specialists in Finance Outsourcing, almost 100% of their delivery staff will have some kind of Six Sigma or Lean training. More importantly, they will be incentivized and rewarded to identify and implement projects on a daily basis. For even the basic online Six Sigma training, $2000 per person is a starting point – that is investment that you no longer have t make. Outsourcing gives you access to a skills base that has made that investment already.

6. The Price of Flexibility

Often the feeling of Outsourcing is that it is “More For Less”. Taking almost a Supply Chain approach to meeting your future delivery needs means you have to ask the following questions:

How much will it cost to reduce delivery capacity?
What fixed costs will you be left with, even after reducing headcount?
What will the cost be of increasing capacity, whether to deal with an acquisition or just increased volumes?
How quickly can you get the headcount sign off to increase volumes?
What are the onboarding costs (e.g. recruitment, training etc) of adding new staff?
What is the time between recognising the need for increased volumes and having the resources in place to deliver them?

In the modern employment world, temporary resources can give much upside flexibility. Employed for longer, they can also provide the downside flexibility. Until then, they come at a premium that will blow the $34,000/£22,000 fully loaded cost comparison out of the water.

From a 2012-2017 planning perspective I always challenge clients to map out the widest possible range of events that could impact their business. We then carry out an exercise to ensure that their delivery operations – whether insourced or outsourced – are able to address those scenarios at a cost and speed that is proximate to the event.

This is all based on a lot of tough learnings from the last four years. One client, who I recently advised on renegotiating their arrangement, had only factored in upward growth in their contracted volumes. The concept of their business shrinking had seemed alien when negotiating their first arrangement in 2007. Their new contract takes as its starting point the need for a delivery model that adapts operationally and commercially to all future volume scenarios.

Within the certainty of zero or low economic growth, it is the strategic attraction of outsourcing that should provide confidence. Suppliers should be able to react to upturns in your volumes within a matter of weeks. Most events causing this can be foreseen and planned via the normal Service Management procedures.

Planned reductions in volumes can occur on a timeline determined by the client. Unplanned reductions may take 8 or more weeks to filter through to the monthly invoice. Suppliers take differing views on how they recoup their investment in deals, so scenario planning should be taken early on with the down-selected Suppliers.

Key Fact 6. Suppliers offer a significantly more flexible delivery model than any internal function can offer. They have the ability to bring on resources faster, at a lower cost, and reaching a faster level of efficiency than an internal delivery model. With proper account planning they also offer a model that more easily “breathes in, breathes out” to match actual business volumes.

Key Fact 6a. I always warn clients that they are investing in their Supplier, so losing key resources when volumes shrink is a risk. However, the knowledge in an outsourced environment will be more heavily documented and captured in an educational process that can deal with both natural and forced attrition.

7. When Did You Set Up Your Shared Services Operation?

The most common determinant affecting the strength of the Outsourcing business case is the age of the operation. It is worth looking at the business case for any Shared Service Center set up before 2009. The older it is, my experience is that the better the business case is.

A number of the points raised above drive this. Typically, the last serious comparison between outsourcing and insourcing, whether a Benchmark study or a full blown assessment, will have been done several years ago. Since then, limited spending on benchmarking and consulting has reduced the focus on the external world and increased it on the internal operations.

It is worth dusting off those old Shared Service Center business plans. When organizations set up Shared Service Centers in the 1990s and through to the late 2000s, most paid lip service to Outsourcing. It was usually mentioned as a likely future option, but that they would be able to deliver most of the savings internally, by themselves, via Shared Services.

Fast forward to 2012 and I can honestly say that every client I’ve had in the last 2 years has been shocked at the strength of their business case for Finance Outsourcing, even after years of operating a SSC environment.

In the “new normal” world of zero or low economic growth, and with little investment available for back office services, Finance Departments are now taking a fresh and more sophisticated look at what Outsourcing can deliver.

Key Fact 7. If your internal operations are more than 3 years old then there is an 80% chance (based on my experience on over $5bn worth of deals) of there being a strong business case for outsourcing. The costs of investigating it are now lower than ever, and the results give you a clear confidence.

Judge Some Facts Before Exchanging The Money

When you will go traveling, then you have to take the things, which you will need in that place. It is necessary because you will not get the facilities of your home there and you have to be prepared for every situation. But when the matter comes to the visiting of a foreign country, then apart from our excitement we have to think about the thing first is the money. As all of us know that there is variety in the currency of different place. So, we must take the proper currency of that place as we cannot do anything without it. There are some methods, by which you can exchange the money, like the banks, the ATMs or from some brokers.
The banks are the most reliable medium for exchanging the money. You can be assured by the fact that you will get the service authentically. They will systematically exchange the currency and you don’t have to think about it. You can also convert it from the banks of that place also. You will get the same reliable service. But as you are going to a public sector, then it will take some time and you have to wait for it. So, if you don’t have the time to wait there, then you will face difficulty by exchanging through the banks. The banks also charge high rates for converting the money, then it can be expensive for you.
You can take the money from the ATMs also. It is the most convenient medium for getting your cash, as you yourself will draw the money and you don’t have to depend on someone for this. So, you can take the money whenever you needed and it is the fastest service. But there I also the problem, as the ATMs charge a very high price for drawing the money. It will become more expensive for you as you have to pay more than the normal transaction. If you think that you will get the money at a time, then also it will not be safe for you to carry so much money to an unknown place. But with every transaction, you have to pay the charge.
When you will try to go some brokers for Cash Exchange, then it becomes easy for you as you can get the money by sitting at your home. You can do it by online and the agent will come to your home and will take the money from you and will also return it within the given time. It can be a suitable option for you as you don’t have to do anything for the exchanging the cash. But there also can be a problem as the matter is about your money, then you have to be a little careful and have to know about the broker and the agent, who will be the medium of transaction. If they are not reliable enough, then your money will not be safe enough. There is also the matter of the false currency as it has happened in the services like Australian Currency Exchange. So, be careful about every facet of exchanging your money so that you don’t have to waste your money in the wrong place.

Top 6 Advantages Of Student Loans

It is just a common myth that only the federal loans provided by the UK government are cheaper and easier to repay than the student finance options provided by the private direct lenders. However, if you see the APR and repayment modes, then you come to know that private student loans are the clear winner! Let’s have a quick look at the top 6 advantages of education funds offered by the direct lending companies:

Borrow Short-Term and Long-Term Funds

Whether you are looking for a big amount to complete the higher education course, or need short-term funds, to give just hostel and tuition fees; both options are easily available and you can access the required funds in less than 24 hours without facing any hurdles. You can ask the lender to transfer funds directly to your bank account or deliver to your doorstep.

No Documentation to Waste your Time

The time of a student is very precious and instead of taking stress about the cash, he should focus on studies. Direct lending companies know the importance of young generation in the development of the UK and hence they offer paper free student loans plans. You are not required to submit your last class mark sheet or the address proof.

Apply Online in Just 2 Minutes

You don’t have to bunk classes or take leaves from the college, just open your laptop or smartphone and apply for the student finance loans on any reliable direct lending website. You would need just 2 minutes to complete the online application procedure. No hard copies or soft copies are required.

Avail Funds with No Guarantor

Students don’t have a big network to arrange a guarantor. They are dedicated towards their studies and interact less with people. Arranging a guarantor is an embarrassing task for them as people are not ready to co-sign their application. They can easily access student education loans with no guarantor and no broker by applying to a reliable direct lender.

No Hurdle of Bad Credit History

Some students have bad credit issues due to pending credit card bills or some other reasons. Banks and conventional lending companies don’t entertain their funding requests. However, they can easily secure the cash by applying student loans to a bad-credit friendly lender. There are no hidden charges. You can compare various deals and grab the best one with the lowest APR.

Easy and Flexible Repayment Modes

Everybody knows that a student can’t repay funds during his education time. He doesn’t have a steady source of income. Direct lenders offer various student repayment plans that can be chosen as per comfort. You can either start repaying in installments from the next month or repay the total debt in instalments after completing your education.