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Companies that look for factoring tend to be pretty cost sensitive. Because of this, they will negotiate very hard in order to try and get the best possible factoring rates. The problem is that most do not negotiate the factoring advance as aggressively and this is where they miss an opportunity. They focus on the “total cost” of factoring and neglect to take into account the “cost per dollar” of factoring.

A low rate and a high advance produces the lowest cost per dollar of factoring When you negotiate your factoring proposals, be sure to negotiate both. It is possible to have two equal transactions in every way but the advance is different. They will both have the same total cost but will have a different cost per dollar. Keep this in mind.

Disclaimer: This article is intended as informational only. Full Post…

Over the last several years, several of our clients have changed their residences to Florida to avoid certain Tennessee taxes, including our inheritance taxes. Migration to avoid state inheritance taxes has also been occurring in other states.

Last week, the Wall Street Journal published an article about various states, including Tennessee, that are considering a repeal of their death taxes. The article states that “the main obstacle to reform in Nashville is GOP Governor Bill Haslam…”

Governor Haslam responded to the Wall Street Journal by writing a letter to the editor. In his letter, the governor points out that he has recommended repealing the taxes in the next three years and that he has worked with House Finance Committee Chairman Charles Sargent to completely repeal the taxes in four years. Indeed, the House Finance Subcommittee has recommended an amendment to House Bill No. 3760 that

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The Business, Innovation and Skills Committee (BIS) has published a report into Debt Management examining payday loans and debt management companies. The report makes recommendations for future Government action.

Source: UK Parliament

Most factoring transactions do not pay the full value of the invoice immediately. Rather, they are broken down into two installment payments. The first installment, called the factoring advance, covers 70% 85% of the invoice and is paid upfront. The reminder, called the rebate, covers the remainder (less fees) and is funded once your customers pay the invoice in full.

However, there are some factoring transactions that are designed as a single installment transaction. This is commonly referred to as full advance invoice factoring. These types of transactions are common in the transportation industry through a freight factoring program. In these transactions, the client pays a flat fee and gets a single advance that ranges from 95% to 97.5% . For example, a company with a hypothetical 95%/5% plan would pay a 5% fee and get an immediate 95% advance.

Fees for invoice factoring will vary based on the size of the account and the credit quality of your customers. One obv Full Post…

This is the fourth article of a series dealing with the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“Act”). For the first three articles, see:

Part 1 – Charitable IRA Rollovers
Part 2 – Estate Tax/Carryover Basis Election for 2010 Decedents
Part 3 – Temporary $5 Million Estate Tax Exemption

The Act temporarily increases the gift tax exemption to $5 million for 2011 and $5 million increased by inflation for 2012. For example, if inflation for 2011 is 2%, the gift tax exemption will be $5.1 million in 2012. The Act decreases the gift tax exemption to $1 million for gifts in 2013 or later.

In addition to increasing the gift tax exemption, the Act set the maximum gift tax rate at 35% for 2011 and 2012. The Act increases the maximum gift tax rate to 55% for 2013 and future years.

The temporary nature of the higher gift tax exemption provides an incentive to make gifts in 2011 and 2012. If you cho

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