Categories
Blog

How to Find the Best Small Business Line of Credit [2021]

Whether it’s a start-up or an established line, you’ll be in need of funds. It may be for seasonal or sudden surge in demand or an unprecedented gap in revenue return, among numerous other reasons. If you need funds quickly and easily, then the business line of credit can be a solid option.

[wpsm_column size=”one-half”] [wpsm_titlebox title=”Table of Contents” style=”1″][contents h2 ][/wpsm_titlebox] [/wpsm_column]

What is a Business Line of Credit and How Does it Work?

You must be familiar with a credit card.  This is an arrangement between a financial institution like a bank and you, where any money is not available to you but you are allowed to spend up to a certain amount. This amount is your credit limit. You can spend anytime and anywhere till you reach the credit limit. You can then repay the amount with interest and fees or keep the borrowing line open by paying a minimal amount.

[also-recommended-box title=”” href_title=”Line of Credit: Online Lenders vs. Traditional Banks” rel=”/blog/line-of-credit-online-lenders-vs-traditional-banks/” type=”3″] Recommended Reading for You: [/also-recommended-box]

A business line of credit functions like a personal credit card, with a bigger amount to spend. Like all other lines of credit, they have a set amount of money that can be borrowed as needed, paid back, and borrowed again. The interest, fees, or the size of payments along with other rules are set by the lender.

How different is Business lines of credit compared to a business loan?

There are quite a few differences between a business Line of Credit and a business loan:

  • Maturity Terms – In general, for a business loan, you can qualify for anywhere from $1,000 to $5,000,000 with an interest rate varying from 4% to 25%. The repayment terms start from 1 year and can go up to 25 years. Whereas for a business line of credit, you can get up to $500,000 with interest rates hovering around 8%. But the repayment term typically has a maturity period of 1–2 years.
  • Rates of interest – In case of a business loan, the rate of interest is fixed over the term. A business line of credit has variable interest rates. This means that if you default on any payment or be late or exceed the credit limit, there is a chance that you will be penalized at a higher interest rate.
  • Ease of use /flexibility – Business lines of credit provide you with a pool of money that you can dip into when you need it. You only pay interest on the money you use. Compared to that, a business loan provides you with a one-time lump sum amount, and you will have to pay interest on the full amount whether you use it fully or partially. The nature of a business LOCs makes them more appealing to meet a short-term or immediate requirement or a stimulus plan like building stock before a festive season. Business loans on the other hand are more suitable for long-term investments like building infrastructure or real estate.
  • Repayments – you will have to repay a business loan consistently and constantly. Whether the payments are set weekly, bi-weekly or monthly, you can’t stop them till the full amount is paid. In a business line of credit, if you don’t use the line of credit for a couple of months then you do not need to pay anything for that period. Even when you have to pay, you have the flexibility to make a partial or full payment. For a partial payment, the balance will be carried forward to the next billing cycle.
  • Ease of loan approval – Getting approval for a business line of credit isn’t difficult. Most lenders are quite lenient with this form of funding and will approve a credit score as low as 560. Your company needs to be in business for at least 6 months and earn at least $50,000 a year. Line of credits also takes shorter approval time and it is possible in some cases to get access to the funds within a day. Business loans are stricter in their approval and most often require collateral. They also require a higher credit rating and are slow-moving with a lot more paperwork.
[also-recommended-box title=”” href_title=”How Does a Business Line of Credit Work?” rel=”/blog/how-does-a-business-line-of-credit-work-and-why-it-might-work-for-you/” type=”3″] Recommended Reading for You: [/also-recommended-box]

Secured Vs. Unsecured Business Lines of Credit

A business line of credit can be secured through a variety of methods. Property or other fixed assets, inventory, equipment, or equity can be used as collateral. The funding agency will recover the amount by selling the collateral if the loan defaults. A secured line of credit can get you a higher loan amount with lower interest rates than an unsecured credit line. For a start-up or a new company with a low credit rating, getting a secured credit line can be easier if they can furnish collateral.

Unsecured credit is not safeguarded by collateral. In this case, the rate of interest is much higher than the secured credit lines. Businesses that are operational for quite some time and has built a sizable credit rating might benefit from them more. Often all you need along with your credit rating is a solid business plan.

How to choose the best business line of credit for your small business

Business lines of credit have shorter repayment terms and are apt for short-term needs. You have to be aware of the variable rate of interest and fines incurred for non-payment.  A business line of credit also helps an entrepreneur with poor or no credit rating, build one for future use.

The only way you can identify the best business line of credit is by being meticulous and thorough. You need to identify how much you require, the purpose of the funding and when can you realize and repay the amount. Once you have determined that, compare the offers from lenders on these parameters –

  • Secured or unsecured credit – now you know the difference, you have to weigh the pros and cons to find out which applies best to your situation.
  • Interest rate – compare the interest rates and calculate the amount you need to pay. Go for the rate you think is competitive.
  • Loan terms – you need to be clear on the repayment terms or how the lender wants you to pay back the amount.
  • Fees and other costs – all lenders charge fees. Compare their fees and look out for any hidden costs.
  • Convenience and ease of use – shop around to find out the time taken to make the funds available to you and in what form. A few lenders even transfer the amount to your PayPal account for better convenience.
[also-recommended-box title=”” href_title=”small business loan terms what to know/” rel=”/blog/small-business-loan-terms-what-to-know/” type=”3″] Recommended Reading for You: [/also-recommended-box]

Alternative Lenders: Faster Process for Securing The Best Line of Credit For Small Business

Alternative or on-line lenders pose a solid substitute for traditional banks and Government and other institutional lenders. They work online, making the application process simpler and smoother, and also offer faster approvals, unlike traditional lenders. They also make the funds available to you within a day or two.

If you are looking for a quick and reliable solution, alternative Lenders are the best way to get a small business line of credit. Here are a few of the most reputed among them –

Kabbage

Kabbage can be the choice for getting a business line of credit for business owners who have had problems qualifying elsewhere. They offer credit from $2000 to $250,000 over six, twelve, or eighteen-months term. They require you to be in business for at least a year, annual revenue of $50,000, and a minimum credit score of 560 to qualify. All you need to provide is the information on nature of business, your bank account information, and personal details and you will get an approval within 10 minutes.

[element-for-review-cta id=1393 text=”Small business funding options that fit your business. Qualify in 10 minutes for up to $250,000 line of credit”]

BlueVine

BlueVine prides itself on its service. You need to provide the basic information about your business online and get approval within 5 minutes. They offer credit lines up to $250000 and are a favorite of start-ups as they entertain low credit scores. The terms are typically 6 to 12 months and the interest rate can be as low as 4.8%. you also can choose a weekly or monthly repayment.

Ondeck

Ondeck offers credit from $6000 to $ 100,000 over a period of 12 months. The repayment is fixed at a weekly schedule. You can apply online or over the phone and after approval, you can get access to your funds within the same day. The best part is that Ondeck reports to the Credit Bureau so you can build your credit history as you make timely payments. There are no penalties for early repayment also.

[element-for-review-cta id=1431 text=”A+ rating with BBB, 9.8/10 customer ratings at TrustPilot. Relaxed eligibility requirements and transparent Information for fast financing solutions”]

What Will Affect Your Small Business Line of Credit Cost?

Few factors affect the cost of a business line of credit. They are –

Credit History

Your credit history or credit score will tell the lender about your creditworthiness as a borrower. This will determine the amount of funding you will receive. A high credit rating can fetch an unsecured or a bigger credit line. A poor credit rating will most likely qualify for a lesser amount with higher interest rates. You can get better terms and amounts with collateral though, even with a poor credit score.

You should maintain a personal credit rating of at least 500 to be able to apply and qualify. Traditional lenders like banks and SBA will require a credit score of at least 660.

Loan Amount

A large loan amount will attract larger interest rates. Combined with the lender’s fees it might result in higher APRs. Also defaulting on a high APR would imply that you have to pay a higher fine.

Business Characteristics

Lenders also see how long the business is operating. the older the business, the better is its creditworthiness. The lenders also look at the revenue generated by the business. Your business needs to be operational for at least six months, with annual revenue of $50000 to qualify for a business line of credit.

How to Qualify for a Small Business Line of Credit?

The best way to prepare before applying for a business line of credit is to consider and build on the above-mentioned points. In addition to building a credit score, you also should look at the collateral you can offer to secure the funding.

A solid business plan explaining how you plan to spend the funding and the revenue you are looking at will also help.

How to Apply for a Business Line of Credit

Online applications for line of credit are easier and simpler. Most of the applications whether they are online or on paper would require these basic points –

  • Basic personal information
  • Your personal credit rating
  • Business related information
    • Licenses, registration
    • Bank statements
    • Balance sheets
    • Financial statements showing profit and loss
    • Business and personal tax returns
  • Collateral
  • Current debt schedule

Final Thoughts: The Pros and Cons of Lines of Credit

Business line of credit offers an easy and fast way to avail funding for short term requirements. But they also incur high-interest rates and APRs. Alternative online lenders offer one of the best non bank line of credit for small business. No form of funding is perfect, so you should really focus hard on your requirements and compare offers before applying.

 

Categories
Blog

Franchise Financing: Most Popular Financing Options for Small Businesses

Many congratulations on your decision to enter the franchise business! Let’s help you with how to finance your franchise. But before coming to finances, you must have weighed the pros and cons of owning a franchise business. Let us refresh them for you –

[wpsm_column size=”one-half”] [wpsm_titlebox title=”Table of Contents” style=”1″][contents h2 ][/wpsm_titlebox] [/wpsm_column]

The upsides and downsides of buying a franchise

There are some disadvantages in owning a franchise –

  • You cannot function independently. The network controls many aspects like selling products or service or operation procedures.
  • Franchisors hold the renewing power – there might be a chance that your franchise won’t be renewed after the tenure.
  • You have to share your profits with the franchisor.
  • Your business reputation is linked with other franchisees in the network.

Despite the disadvantages, there are some practical advantages – 

  • The brand along with the products is already tested and established in the market.
  • You will get extensive support from the franchisor – even if you are a newcomer.
  • You can exchange ideas with other franchises, and even learn from their mistakes.
  • Arranging franchise funding will be easier than an independent business.
[also-recommended-box title=”” href_title=”Should You Buy a Franchise” rel=”/blog/should-you-buy-a-franchise///” type=”3″] Recommended Reading for You: [/also-recommended-box]

Costs of opening a franchise

The cost of owning a franchise will largely depend on the type of business you are getting into. The typical headings can be –

  • Establishment costs – Real estate, build or rent
  • Business licenses, franchise fees
  • Professional fees for attorney or accountant.
  • Setting up offices, equipment, or store, etc.
  • Hiring of personal, training, insurance, uniforms, etc.
  • Advertisement and promotional activities.

When you are open for business, there can be recurring expenses like –

  • Royalty fees to the franchisor – typically 4-8% of the gross revenue
  • Joint advertising and marketing fund – 2-4% of the gross revenue
  • Salaries and other professional fees
  • Supplies and stock
  • Rent, maintenance, and utility expenses.

What is a franchise loan?

A Business loan for a franchise can be any loan that provides you with the working capital for your franchise. This totally depends upon your assessment and requirement, and you should look for the lender offering closest to your needs.

Financing options to open a franchise

You really need not worry about ‘how to finance a franchise?’ There are numerous places offering a variety of financing options to suit most of your needs. These Includee:

  • Franchisor financing
  • Franchise Financing Companies
  • Commercial Banks Term Loans
  • SBA loans, and microloans from non-profits
  • Alternative Lenders that offer Term Loans, Business Line of Credit, Equipment Finance Loan and Invoice Financing and factoring
  • Other sources

Franchisor financing

If you are wondering ‘are there companies that give you start-up money to franchise?’, then franchisor financing is the easiest option for you. They offer a tailor-made solution as they know the scene better than any lender.  They can also offer fee waivers or a softer repayment term.

But a Franchisor financing would also mean regular repayment to the franchisor in addition to the royalty and other fees. It would also mean allowing the franchisor too much control of your business. Compare the franchisor’s terms with other options to find the one best suited to your needs.

Franchise financing company

Many financing companies specialize in funding franchises. They may lend directly or match borrowers with lenders or offer terms that are more customized towards running a franchise. Often, they have a tie-up with Franchisors to finance new ventures.

Commercial bank loans

Bank loans are one of the most common ways to finance your business. Most banks will offer loans but they require collateral. They also require a high credit rating for loan approval.

SBA loans

The US Small Business Administration (SBA) reduces the risk to the lenders by guaranteeing a portion of the loan amount. This motivates the lending partners to offer bigger amount with a lower interest rate and longer period.

There are no SBA franchise loans, but an SBA loan is certainly a coveted option for franchise funding.  But they have a strict eligibility criterion and the process is long. You should consider going for an SBA loan after careful scrutiny of your present state of financial state.

The Paycheck Protection Program (PPP) is a part of the CARES Act specifically designed to help small businesses tackle the economic crisis due to the COVID-19 pandemic. You have to use the loan to keep your workers in the payroll along with their insurances and benefits. You can also use the loan for meeting establishment expenses.

SBA will forgive the loan if you use the funds for the eligible expenses. You can apply through any lender that is participating in the SBA 7(a) program.

The Certified Development Company (CDC) /504 loans are specifically designed to provide growing businesses with long-term, fixed-rate financing for expenditure on fixed assets like real estate, construction, machinery, or equipment.

They typically have 10-20 years of maturity term and can be up to $1 million ($1.3 million for public policy goals) with a monthly repayment schedule.

Alternative lenders

Typically, alternative or online lenders are less stringent about their requirements and have a shorter approval time. They also offer a variety of financing options like business lines of credit, equipment financing, invoice factoring, and invoice financing along with term loans. But this convenience comes at a cost – they have higher interest rates than traditional loans with the stricter and shorter repayment schedules.

Here are some of the versatile options for funding your franchise –

Ondeck

OnDeck offers term loans as well as business lines of credit. Online or phone applications will typically take a few minutes and you will get the fund within 24 hours. They are less stringent about credit scores and also don’t require collateral. They offer discounts for repeat borrowers and can be a good option if you require fast cash.

However, their loans are expensive and they have a fixed repayment plan, without any benefit for early repayment.

[element-for-review-cta id=1431 text=”A+ rating with BBB, 9.8/10 customer ratings at TrustPilot. Relaxed eligibility requirements and transparent Information for fast financing solutions”]

Kabbage

They stand for convenience and versatility. It is possible to apply for a Kabbage loan online and get the money within the same day. You also can have the money in your PayPal or bank account or Kabbage card. They offer a business line of credit and don’t require a minimum credit score from you, instead they look at your business revenue and cash flow. It is a good option if you have a low personal credit score. Be aware of the high annual percentage rate though.

[element-for-review-cta id=1393 text=”Small business funding options that fit your business. Qualify in 10 minutes for up to $250,000 line of credit”]

Funding Circle

They can offer both secured and unsecured loans for your franchise. They are a peer-to-peer (P2P) lending platform where your business is backed up by a community of thousands of people. They offer term loans for small businesses in the range of $25,000 to $500,000, for a period of up to 10 years. You can also avail of the SBA PPP loan through them.

Smartbiz

This is another great option for funding small businesses and your franchise. Along with all types of SBA loans they also offer term loans for shorter durations to allow you more flexibility. The other funding options for you are business lines of credit, invoice financing, and business credit cards.

Do it yourself

Arranging finance for your franchise can also depend on you – like a DIY procedure. Following are certain ways and manners you can arrange finance for your franchise.

Crowdfunding

This is an innovative way to raise funds for your franchise. Promote your product or service on your personal page in the social media with an appeal for monitory contribution or fundraising. You don’t have to pay back the contributors but usually, there is a return gift like a free product or a hefty discount.

You can also go through websites which host crowdfunding, or you can also approach organizations specializing in crowdfunding for a fee.

If you are wondering how to finance a franchise with no money, then crowdfunding is a great option. This also works if you want to bypass the traditional finance application procedure.

[also-recommended-box title=”” href_title=”9 Best Crowdfunding Platforms for Business” rel=”/blog/9-best-crowdfunding-platforms-for-businesses//” type=”3″] Recommended Reading for You: [/also-recommended-box]

Business partner or investor

A partnership is also a simple and time-tested option for financing. You can choose a sleeping partner or share responsibilities but be clear about each other’s role before you sign on the dotted line. The disadvantage is that you have to share profits as well as control of your franchise.

Women entrepreneurs

Many non-profit organizations offer grants specially meant for business start-ups owned by women. These grants often come without any interest or repayment terms. Before you think it’s free money, understand that they come with quite a few caveats. Qualifying for these grants can be really tough and you cannot use the grant money for anything other than the proposed business. You also need to have a solid business plan which aligns with the principles of the organization.

[also-recommended-box title=”” href_title=”Overcoming the Business Challenges Women Entrepreneurs Face” rel=”/blog/overcoming-the-business-challenges-women-entrepreneurs-face//” type=”3″] Recommended Reading for You: [/also-recommended-box]

Veterans

S.B.A has a Veterans Advantage program, offering veterans and other eligible servicemen loans of up to $350,000. There are also substantial fee reductions on major SBA loan programs for business owners with at least 51% ownership of the business.

Minorities

If you belong to a minority community or are planning a business that will serve a minority community then you can access funds for your franchise through non-profit and community-based organizations.

Friends and family loan

This is one of the most common ways to fund your franchise. This sounds hassle-free and informal but you should be clear about the contribution and role of the stakeholders. It is better to put it down legally as you don’t want a strain in your personal relationships.

Home equity

You have an option to take out a second mortgage on your home or a home-equity line of credit, to finance your franchise. But you should be careful and use this option as the last resort as your loan is secured by your home and if you can’t repay you might lose it.

Retirement funds

If you have some money in an IRA or retirement fund, then you can use that amount to finance your franchise. You have to pay taxes on the amount used and also suffer the loss of income, but this can be a useful fund. It is advisable that you don’t use the whole of it as it is your life’s savings.

How to apply for Franchise Financing?

There are certain steps you need to take before applying for your franchising loan.

  • Get your papers in order – Lenders appreciate proper paperwork. They would typically require statements of your personal finances or financial papers of any other business you own along with the franchise agreement.
  • Prepare a business plan – Most lenders want to be clear about how you are going to manage the business. A proper business plan with clear road maps stating your plan will definitely help the approval process.
  • Shop around – It’s beneficial if you talk to different sources and lenders for your financing needs. You might get a more favorable term and also diversify your financing sources to reduce risk.

How can you use your franchise finance?

The price of a franchise may have quite a few latent costs and they are only visible as you start running the business.

You need to list your assets and liabilities to understand how much money you can put in the business in case of emergencies. Do your research to understand how much finance you actually require and prioritize the expenses you plan to meet through the franchise loans.

What is the Difference Between Franchise Financing and a Small Business Loan?

If you are asking ‘Can you take out a business loan for a franchise?’ the answer would be yes – but with a few hitches! A general business loan might have a stricter repayment schedule which might put economic stress on a franchise that has just opened.

On the other hand, some franchise financing options cater to situations unique to franchises. They may also offer franchisor discounts on fees and a more flexible repayment structure.

Final Thoughts

There are numerous ways to finance your dream franchise, but you must know what you need. It will be helpful if you spend some time researching and talking to people. It does not matter if you don’t get it all perfect at the first chance. Having a franchise as your first business will cushion your fall and also can serve as the springboard to launch

Categories
Blog

The Most Frequently Asked Questions About Paycheck Protection Program (PPP) and Loans for Small Business

[wpsm_column size=”one-half”] [wpsm_titlebox title=”Table of Contents” style=”1″][contents h2 ][/wpsm_titlebox] [/wpsm_column]

This article aim to provide guidance to address borrower questions concerning the implementation of the Paycheck Protection Program (PPP), established by section 1102 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act or the Act).

Funding is essential for starting or expanding your small business or start-up. Even if you have started with your savings, you might require funding for the smooth running of day to day operations or your expansion plans and even the unforeseen emergency. When we think about financing or funding for business, we think of loans naturally. In fact, they are the easiest and most common way of business funding – both large and small. Small business has different set of loan requirements from the large-scale ones and need a more relaxed and convenient approach.  Here is all you need to know about funding for small businesses from Government and private lenders, especially the measures adopted by the Government in the present economic scenario like the PPP program.

What is a Small Business Loan?

In simple words, a loan is a borrowed amount that has to be repaid after the term with interest. Many different kinds and types are available to suit most of your needs if you are planning to start or own a small business. A small business loan can range from a few thousand to a few million dollars. By nature, these loans have less stringent requirements and are more flexible and convenient enabling the small business to avail the funds. Often, they also provide an incentive for the borrower, which minimizes the expenses for the business and helps it run smoothly.

What are the Qualifications or Eligibility for a Small Business Loan?

Any business across the country, with up to 500 employees is eligible for a small business loan. Apart from that, self-employed individuals, independent contractors, and sole proprietors are also eligible. A good credit score or history both personal and business is required to avail of a loan easily.

Where Can You Apply For a Small Business Loan

 You can get a loan from anywhere. You can secure it from your friends and family, crowdfund it, or approach organizations like Banks and online alternative lending agencies. Alternatively, you can also apply for a Government small business loan 

What are the Best Alternative Business Loans?

Typically, when you think of loans you think of banks. Apart from banks, you should also consider private financing agencies and Government loan programs, especially for small business loans. They offer more flexibility and convenience and can customize the offers more to cater to your need.

Loans offered by private Funding Agencies

Funding agencies and banks also offer finances for your small business. They are often more flexible, quicker, and customizable than Government loans. However, their interest rates are higher than Government small business loans. One of the best financing agencies Kabbage offers unmatched convenience and versatility. You only need to apply for a Kabbage loan online and get an approval within minutes if all the papers are in order. The funds are also disbursed within the same day, which for a Government loan can take days or even weeks.

Kabbage offers a business line of credit and the requirements are quite simple – you just have to be one year in business with $50K annual revenue to be eligible for a credit up to $100,000. They don’t need a minimum credit score and look into your business revenue and cash flow for assessment and approval. Kabbage funding is one of the best options for entrepreneurs with low personal credit ratings. The money is disbursed in your PayPal account, bank account, or a Kabbage card. This offers unmatched convenience for the customer.  Apply for a kabbage business loan if you are looking for –

  • A fast and automated approval
  • Quick disbursement of funds
  • The convenience of accessing cash
  • Loan assessment on the strength of your business.
  • Funding for small business without considering your personal credit score
[also-recommended-box title=”” href_title=”Small Business Loan Terms – What to Know” rel=”/blog/small-business-loan-terms-what-to-know/” type=”3″] Recommended Reading for You: [/also-recommended-box]

Federal Government Small Business Loans

Government loan programs offer to fund to people starting or expanding a business. These loans are particularly helpful for them who might not qualify for a traditional bank loan.  You can use these loans for –

  • Purchasing new equipment, machinery, parts, supplies, etc.
  • Financing leasehold improvements
  • Paying the commercial mortgage on buildings
  • Repaying existing debt
  • Establishing a line of credit

You can use these government resources and services to find a loan that best suits your business needs:

Why Go For a Government Loan to Small Business?

There are few reasons for selecting a Government small business loan

  1. Private lenders put more emphasis on your credit report and financial history, which might be a problem with a startup or a new venture. The private lenders want to minimize their risk, but this is not the case with the Government loan programs. However, you will still need a decent credit report and fulfill other guidelines set by the Government.
  2. The interest rate set by the government is much lower than in the private sector. This matters for a startup with limited resources.
  3. If your business has a jittery start but you develop a recovery plan and need finances to roll these plans, Government loans can be easier to get.
  4. These loan programs are created to promote economic growth and create new jobs in different areas including fringe areas like rural business, economically backward communities, and others.

Government Grants

A grant is a way the government funds your ideas. They are for non-profit and educational institutions, focussing on projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and other related programs. For a full list of grants, visit the website of Federal Domestic Assistance (CFDA).

Are Government grants 0 interest in small business loans?

The grants offered by the Federal Government are not for starting or growing a business, but several state and local programs offer business grants. They are not Government benefits and usually are set up for a specific purpose with specific rules. You are required to  match the expectations and requirements of the funds in order to avail them. Often, they are also given in addition to or in combination with other forms of funding like a loan.

[also-recommended-box title=”” href_title=”Small Business Grants to Grow Your Business” rel=”/blog/small-business-grants-to-grow-your-business/” type=”3″] Recommended Reading for You: [/also-recommended-box]

Small Business Administration (SBA) loans and grants

The SBA is a U.S. government body, that supports all small businesses and entrepreneurs. SBA partners with banks and other organizations to offer you Government loans. The Government will guarantee a portion of the loan and will pay that amount to the lender if you default. This guarantee by the Government increases your chance of receiving the loan as it lessens the risk to the lender. This arrangement benefits both the small business and the lender. You get the capital to start or grow your business and the lender gets more approved small business loans increasing its business.

Some of the more popular SBA small business loans are:

  • 7(a) Loan Guarantee Program: This is for starting or growing a small business, with a maximum loan size of $5 million. The uses of proceeds include: starting a business, expansion/renovation, new construction, purchase of land/ buildings, purchase of equipment, improving lease-hold, fixtures, refinancing debt, seasonal line of credit, or inventory.
  • Express loan program: This program allows loans up to $350,000 for a maximum period of 7 years. There is an option to revolve the loan after completion of the term. The uses of proceeds in this loan program are the same as the standard 7(a) loan.
  • Microloan Program: This program offers loans through non-profit lending organizations to under-served markets. The use of proceeds includes working capital, supplies, fixtures, machinery & equipment but does not include real estate. The maximum loan amount is $50,000, with an average loan size of $14,000.
  • 504 Fixed Asset Program:  these are fixed-rate, long-term loans that are aimed at business models directly benefiting the community. This aims to foster economic development, or bring in much-needed service to the area or create/retain jobs in the area. The maximum loan amount is $5 million and the use of proceeds is limited to an acquisition or refinance of fixed assets.
  • Community Advantage loan pilot program: This program allows lenders to help small businesses in under-served markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.

How Do I Apply For a Small Business Loan First Time?

Most of the loans are an online process, but there are certain important steps you should follow before you submit your application –

  1. Know the reason why you want a loan and the exact loan amount – this sounds easy but is tricky as for a new business the actual loan amount can only be anticipated. For a running business, the required loan amount can only be determined after consulting the yearly balance sheet.
  2. Review your credit history and credit score – if your business is more than three years old then your business credit history will also be taken into account apart from your personal credit history
  3. Prepare your business plan – This is the most important step as it will accompany your loan application and will be majorly responsible for a small business loan A good plan will have a financial record of your business over several years. It will also have details of the collateral or assets you will use to secure the loan. Last but not the least, it should include a detailed analysis of the market You will need to include an analysis of the market you intend to serve, the business projections you are looking at and your own experience in the business.
  4. Review your loan options – when you are clear about your requirements, look at all the lenders to know the best deal. You can also consider talking to funding consultants for professional advice. You can also avail of free consultation on your small business loan from non-profit organizations like SCORE and SBDC.
  5. Meet your lender and present your case – It will be convenient if you plan a presentation which states your case. Work on the presentation so that the concerned officials understand and appreciate your requirement.
  6. Apply for the loan – fill in the application form, check all the required documents, and apply.

What is the Minimum Credit Score for a Small Business Loan?

Your credit score is measured in the FICO score, which ranges between 300-850 for business loans. You need a score of around 620 to qualify for an SBA small business loan and 640+ for SBA 7(a) loans. In most cases, though a good and steady business credit report is enough to qualify. Moreover, it gives confidence not only to the lender but also to you.

How to Apply for a SBA Small Business Loan?

The loan application process is completely online.  Every state of America has at least one SBA office, and they will provide you with the details if you contact them with your business model and plan. If you are contacting a lender like Kabbage, then the experts will be able to guide you to the best plan.

How Do I Get SBA Small Business Loan Application Form?

The whole process is online so you can download the loan application forms from the SBA site. The process requires some amount of paperwork and so if you are intimated by it then it is better to take the help of loan consultants who will make things easier. Your lender can also help you – the consultants at Kabbage will not only guide you but also have your forms filled in, have your documents verified, and get approval for a Government small business loan easily.

What Documents Are Needed For a Small Business Loan?

For an SBA loan application, you need to prove your eligibility. The lenders want proof that you and your business are a good risk and they want to check the 5C’s –

  • Capital (down payment)
  • Credit (credit score and history)
  • Capacity (ability to pay off the loan)
  • Collateral (property or asset to guarantee the loan)
  • Character (past business experience).

Having all the relevant paperwork ready will help to move the application forward and get the approval quickly. Here’s a list of the documents you’ll need to provide during the initial loan application process.

If you need a loan to buy an existing business, you’ll also need to provide the following document in addition to the above list:

  • 3 Years Business Tax Returns
  • Current Interim Financials or balance sheet showing profit & loss.
  • Letter of Intent or Purchase Agreement

If you need a loan to expand or maintain an existing business then you will need these documents:

  • 3 years business tax returns
  • Current interim financial or business balance sheet showing profit and loss.
  • Business debt statement 

What Happens If You Default On a Business Loan?

When you default on your business loan or don’t repay the loan, the lender will initiate legal proceedings to recover the loan amount. If the loan is secured with collateral or assets, then they will be seized. If the lender is still not able to recover the loan amount, then your business can be filed for bankruptcy. defaulting eats into your reputation and credit score. This will make it difficult to get a business loan in the future.

The Financial Impact of COVID-19

Emergency Small Business Loans

These are Government funding for addressing a disaster that can be physical or economical. These are applicable in special situations and Presidential declaration of emergencies

Economic Injury Disaster Loan Program (EIDL)

The SBA disaster loans are the primary Federal assistance to address economic injury to private and non-profit organizations from a declared disaster. The Economic Injury Disaster Loan Program (EIDL) can provide up to $2 million of financial assistance. The actual loan amount however is based on the amount of economic injury sustained.  An EIDL provides relief from the direct economic injury from the disaster and it can also help you attain the financial obligations, had the disaster not occurred. However, they do not replace lost sales or revenue.

The EIDL program also provides a loan advance for businesses losing money due to the coronavirus. The main features are

  • Advances up to $10,000.
  • Money is available within three days of a successful application.

SBA Express Bridge Loans

The SBA Express Bridge Loan (SBA EBL) provides direct loan assistance to small businesses located in communities impacted by disasters declared by the President and also by SBA under its authority. The EBL Pilot Program authorizes SBA Express Lenders to provide funds up to $25,000 on an emergency basis to small businesses in the affected communities.

From March 25, 2020, SBA expanded the program eligibility to small businesses across the country, who are adversely affected by COVID-19.  Normally, EBL loans can be distributed for up to six months after the date of a Presidential Disaster Declaration. But the expansion for the COVID-19 scenario, allow loans to be made through March 13, 2021. The maximum loan term is seven years, but your lender may allow a longer-term if you haven’t received long-term disaster financing.

SBA Debt Relief

The Federal Government has provided immediate relief to small businesses that are funded under with SBA 7(a), 504, and microloans program. For all these existing borrowers, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be extended to new borrowers who avail of an SBA loan within six months of enacting the CARES Act. This program will also defer loan payments on disaster loans made earlier till December 31, 2020. 

Who Is Eligible For Debt Relief?

You are eligible if –

  • You have an existing SBA 7(a), 504, or microloan loan (other loans are not eligible) but payments are already deferred under those loans.
  • You apply for and receive an SBA 7(a), 504, or microloan within six months of the CARES Act (between March 27, 2020, and September 27, 2020).

To check your eligibility please consult the SBA website.

Paycheck Protection Program (PPP)

We are facing an emergency now as the Coronavirus (COVID-19) outbreak has caused an unprecedented economic disruption. On Friday, March 27, 2020, the President signed the CARES Act into law. The Act contains $376 billion in relief for American workers and small businesses.

PPP stands for Paycheque Protection Program (PPP) and is a temporary program under the CARES Act, aimed at offering direct relief to businesses to keep their employees on the payroll.

In early May 2020, Congress provided an additional $320 billion in funding for PPP loans apart from the $349 billion sanctioned earlier.  

What Can I Use a PPP Loan For?

 You should use 75% of the PPP loan for Payroll costs including salaries and other benefits.

The remaining 25% can be used on

  • Interest on mortgages, acquired before February 15, 2020.
  • Rent, under lease agreements, started before February 15, 2020.
  • Utility bills which started before February 15, 2020. 

Payroll Options for Small Businesses

Who Is Eligible For The PPP Loan?

The PPP loan is for –

  • Organizations with 500 or lesser employees, who primarily reside in the US.
  • Self-employed individuals.
  • Private non-profit organizations
  • Veterans organizations.
  • Tribal business concern.
  • Sole proprietorship concerns
  • An organization that was in business before 15th February 2020 and had independent contractors as its suppliers.
  • Seasonal businesses if the business was in operation for any 8-week time between May 1, 2019, and September 15, 2019
  • Farmers, ranch workers, and agricultural producers.

SBA has waived the affiliation standards for small business in the PPP program in

  1. Hotel and food services Industry
  2. SBA franchises
  3. Small businesses that receive financial assistance from business investors licensed by SBA

What Counts As Payroll Costs?

Payroll costs for the PPP program include –

  • Salary, wages, commissions, or tips (capped at $100,000 annually for an employee)
  • Employee benefits including parental, family, medical, or sick leave; Group health care benefits including insurance premiums; and payment of any retirement benefit. Costs for vacation and allowance for separation or dismissal are also included.
  • State and local taxes assessed on compensation.

For a sole proprietor/self-employed or independent contractor, payroll costs mean wages, commissions, income (net earnings from self-employment) This is capped at $100,000 on an annual basis for each employee.

What is The Loan Amount and Interest Rate of a PPP Loan?

The maximum loan amount is 2.5 times of the 2019 average monthly payroll cost of the business. The maximum amount of the loan is $10 million.  The interest rate of PPP loans is 1% with a 2 years duration. Also, they don’t require any collateral or personal guarantees, and there are no fees charged to borrowers.

All payments are deferred for 6 months although the interest will continue to accumulate over this period. If you want to pay the loan back before the two-year term there are no prepayment penalties or fees.

Also, any outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020, and April 3, 2020, can be added to the PPP loan amount request.

What is Compensation For Employee Owner?

Apart from business organizations, the PPP program also includes employee-owner compensation up to $100,000 per person. Independent contractors and self-employed individuals employed by the organizations should apply for their own PPP loan starting from April 10, 2020. The program is open until June 30, but you need to apply quickly as there are a funding cap and high demand for these loans.

Is a PPP Loan For Startup Small Businesses?

The PPP loan is aimed at existing businesses and attempts to retain the workforce of the business. The main stipulation of the PPP is that businesses must keep employees on the payroll, or re-hire by June 30, and must maintain their salary levels at 75%. Businesses who use the funds to do this will be for a 100% forgiveness incentive. If you reduce your full-time employee headcount or decrease salaries and wages by more than 25% for any employee that made less than $100,000 annually, the forgiven amount will be reduced.

In short, this is a Government financial support so that the small businesses survive the crisis, employee headcounts remain stable, and businesses bounce back when the economy improves.

[also-recommended-box title=”” href_title=”Best Options For Startup Business Loans” rel=”/blog/business-loans-for-startups/” type=”3″] Recommended Reading for You: [/also-recommended-box]

How Do I Apply For a PPP Loan?

You have to apply through any existing SBA lender. Since all loan terms will be the same for everyone receiving PPP loans, irrespective of the amount of the loan or their lender, there is no best lender for PPP loans or best bank for PPP loans. You should contact your local lender with whom you have an existing relationship to have your loan processed and approved. For example, if you have a relationship with Kabbage then you should apply through their portal for convenience. The famed simple online application and fast processing make the Kabbage PPP loan application and approval as convenient as possible.  The application is available on the Treasury Department website (home.treasury.gov).

Important:  If you receive funds under both EIDL and PPP, then you cannot use both the loans for the same purpose. The EIDL advance will be subtracted from the forgiven amount of the PPP loan. The PPP loan can, however, be used to refinance the EIDL loan.

When Can I Apply For a PPP Loan? 

  • Small businesses and sole proprietorships can apply and receive for the loan starting April 3, 2020.
  • Independent contractors and self-employed individuals can apply and receive the loan from April 10, 2020.

What Do I Need To Apply For a PPP Loan?

For any COVID-19 funds, you will have to specifically mention how you are going to utilize the funds. For PPP loans, you have to submit the loan application along with the payroll documentation of your business by 30th June 2020. Remember that under the PPP program you can make only one loan.

As part of your application, you need to certify in good faith that:

  • How the loan is necessary for your business/ operations in the present economic uncertainty.
  • That you will use the funds to retain workers and maintain payroll or to make a mortgage, lease, and utility payments incurred before February 15th, 2020.
  • You have not and will not apply for another loan under the PPP program.
  • Detailed documentation of the number of full-time employees on payroll along with the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
  • Your tax documentation (same that you submitted to the IRS so that the lender can calculate the loan amount you are eligible for.
  • A declaration that all the information you provided in your application and all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program or using the loan for fraudulent purposes, is punishable by law.

What Is PPP loan Forgiveness?

SBA has issued the PPP loan forgiveness application, working with the Department of the Treasury. There is an in-depth instruction on how to complete it. The document specifies how a recipient can apply for the PPP loan forgiveness and also allows them to calculate the amount forgiven. The instructions summarize eligible and non-eligible payroll costs, mention the documents that need to be submitted by borrowers with the PPP loan forgiveness application and also provide a step-by-step direction for completing the forms.

If during the period of loan utilization, 75% of the amount was used for payroll maintenance then the loan amount will be fully forgiven. You will owe money after the term ends

  • if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utility payments over the 8 weeks after getting the loan.
  • If you use more than 25% of the forgiven amount may be for non-payroll costs.
  • If you do not maintain your staff and payroll.

How Much of My PPP Loan Will Be Forgiven?  

The amount of your PPP Loan that can be forgiven will depend on –

  • Maintenance of your staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount after 15th February 2020. After this period the only exemption will be in case of retirement both normal or voluntary or a voluntary request for reduction in work hours and payment by an employee.
  • Maintenance of Payroll: Your loan forgiveness will be reduced if you decrease salaries for any employee that made less than $100,000 annually in 2019 by more than 25%.
  • Re-Hiring of your employees: You have to restore your full-time employment and salary levels by June 30, 2020. This will apply to any changes in the employee and payroll status made between February 15, 2020, and April 26, 2020.

How Can I Request Loan Forgiveness?

You can submit a request to the lender that is servicing the loan. The request should include

  • documents that confirm the number of full-time equivalent employees and their pay.
  • Documents confirming the payments on the eligible mortgage and/or lease.
  • Utility obligations and bills.
  • The employee application, in case of any voluntary retirements or request for reducing work hours and pay. 

Consultation for PPP loan forgiveness

You can consult an expert if the paperwork is too much of a burden. When you are consulting a PPP loan forgiveness consultant, the services would typically include –

  • A review of your PPP loan application funding
  • A review of the projected spending of PPP loans with a focus on how to maximize the loan forgiveness amount.
  • A review of the FTE workforce and salary reduction and, if applicable.
  • Estimating the amount of PPP loan which can be forgiven and ways to maximize it.
  • Calculate the payroll cost according to SBA guidelines.
  • Assistance with the SBA’s PPP loan forgiveness application submission

While consulting an expert on PPP loan forgiveness can yield the desired results remember that they will charge a fee.  You can avail the free resource like the forgiveness calculator provided in the SBA website if the calculations are too overwhelming for you. You can find similar free resources in the sites of other lenders too.

It is always better to look into the loan before availing it. Be sure about what you need and how much. For a first-time business venture, an extensive research before applying for a small business loan always pays off.

If you are in an existing business then it is advisable to apply for the PPP loan as it is designed to pull us out of the economic crisis due to unprecedented circumstances.

Final Thoughts:

Small business owners may rely on the answers provided in this document as interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rules (“PPP Interim Final Rules”). Bizit is reviewing online lenders that support relief efforts by the SBA by offering reviews to help small businesses get fast access to this critical funding. Small businesses can now apply for PPP through Kabbage, Bluevine. Lendio and other online alternative lenders.

Categories
Blog

Will Lease Finance Turn as Winner after The COVID-19 Crisis?

[wpsm_column size=”one-half”] [wpsm_titlebox title=”Table of Contents” style=”1″][contents h2 ][/wpsm_titlebox] [/wpsm_column]

Lease financing is a medium of financing where the owner of an asset gives it on lease to someone else against fixed, usually monthly payments. The owner is known as the lessor, the person taking the lease is called the lessee and the periodical payments are known as the lease rental. While the lessee uses the asset, the lessor reserves the right to its ownership. An agreement is signed to this end and on completion of the fixed time period for which the lease has been given, the lessor may sell the asset to the lessee, end the lease or renew the agreement with the same clauses or make necessary changes.

What Are the Types of Lease Financing and How They Work?

All financial leasing agreements can be categorized into the following types:

  1. Capital Lease or Finance Lease or Sales Lease – Finance leasing is an agreement in which though the ownership of the asset lies with the lessor, the lessee has all operating controls and has to share the risks as well as rewards associated with the asset. Changes in valuation of the asset could lead to rewards or risks depending on the market conditions. The owner or the lessor recovers his investment and gains by interest paid by the lessee through rentals on the asset.
  2. Operating Lease – Operating lease is one where the risks and rewards of the asset are not transferred to the lessee. These are usually short-term leases in which the lessor rarely recovers his total investment during the primary period of the lease. Often, in such lease agreements, the lessor will offer advice regarding the service and maintenance of the asset to the lessee for smoother business. Hence, it is also referred to as service lease.
  3. Sale and Leaseback – In this arrangement, an asset already owned by a vendor is sold and then put on lease again by the buyer to the same vendor. The firm or vendor benefits in two ways – it receives cash by means of selling the asset and is also able to retain the economic use of it by making periodic lease rentals.
  4. Direct Leasing – In direct lease, the lessee acquires the permission to use an asset which it doesn’t own. This kind of agreement maybe directly between the lessee and the manufacturer of the asset or via a lease finance company. In the latter case, the finance company will arrange the purchase of the asset from the manufacturer and enter into an agreement with the lessor(manufacturer) for the lease lending.
  5. Leveraged Leasing – In this kind of arrangement, a lessor will purchase the asset by borrowing funds from a bank or financial institution. The asset is given as security and the rentals from the lessee are used to pay the loan installments. The lessee may directly pay the lending institution and only give the excess amount to the lessor. The lessor thus remains both the owner and the borrower. Such financing could be offered by a bank or a lease finance company.
  6. Straight Lease and Modified Lease – In a straight lease, the lessee firm pays rentals during the expected service period of the asset and during this period, there is no provision to make any changes to the terms and conditions of the lease. Modified lease allows changes to be made during the lease period including the option of the lessee returning the asset, terminating the lease and purchasing the asset.
  7. Primary and Secondary Lease – In a primary lease arrangement, the lessor recovers a major part of the cost of the asset during the initial phase of the lease while a nominal amount is left to be paid for the secondary lease. This amount is known as peppercorn rental. Another name for this kind of lease is front-ended and back-ended lease.

What is the Difference between Finance Lease and Operating Lease?

An operating lease is one in which all risks and rewards associated with the asset ownership lie with the lessor and the lessee just operates the asset. The asset is returned by the lessee at the end of the agreement term. The risks and rewards of the asset are transferred to the lessee in case of a finance or capital lease. In an operating lease, the ownership remains with the lessor for the entirety of the leasing period while in a capital lease, there is a provision for transferring ownership. In accounting records, an operating lease is treated like a rental agreement, where lease payments become business expenses and do not appear on the balance sheet. Whereas, a capital lease is treated like a loan as if the ownership comes to the lessee, it is an asset which will make it to the balance sheet.

[also-recommended-box title=”” href_title=”How to Finance Equipment for Your Business” rel=”/blog/how-to-finance-equipment-for-your-business/” type=”3″] Recommended Reading for You: [/also-recommended-box]

Pros and Cons of Lease Finance

Following are the basic pros and cons of lease financing:

Pros-

  • It provides assured regular income to the lessor for a fixed period of time on his existing asset. Additionally, he is able to recover his entire investment on the asset via the lease rentals.
  • If it is a finance lease, then the rights of ownership will lie with the lessor.
  • Lessor will enjoy tax benefits as there will be depreciation of the leased asset.
  • The interest rate of return on lease rental is higher than the interest to be paid for financing of the asset making leasing financing a profitable endeavor.
  • There is a consistent demand of lease lenders as this kind of arrangement can be maintained even during economic crises. Leasing has a great market of growth.
  • A lessee on the other hand does not have to spend a huge amount for acquiring an asset and needs to pay only small, monthly rentals.
  • Lease payments are mostly considered business expenses and can thus entail tax benefits.
  • Lease rentals remain fixed irrespective of inflation, thus the lessee isn’t affected.

Cons:

  • Since the lease rentals remain fixed, the lessor cannot increase the amount even if there is an inflation or if the value of his asset currently higher than that at the beginning of the agreement.
  • Sales tax may be double in certain cases – once during the purchase of the asset and again during leasing.
  • If the lessee is not cautious, there might be damage to the asset making it unusable at the end of the lease period.
  • Lease agreements cannot be ended midway and thus if the lessee finds the asset to be a bad investment, he cannot stop the rentals midway.
  • As the lessee is not the owner of the asset, it cannot be reflected as one’s asset in the accounting balance sheet leading to understatement.

Accounting Treatment in the USA

According to the US accounting standards, a lease which meets any of the following criteria will be considered a finance lease:

  • The lessee becomes the owner of the asset at the end of the agreement term
  • The lease agreement has the provision whereby the lessee may purchase the asset and he is more or less certain about doing it
  • The lease term is for 75% of the asset’s remaining economic life
  • The current value of the lease rentals and the remaining value to be paid by the lessee is equal to or exceeds the total value of the asset
  • The asset must be of such a special nature that it ceases to have any alternative use to the lessor at the end of the agreement.
  • Since a finance lease is capitalized, both assets and liabilities in the balance sheet increase. As a consequence, working capital stays the same.

The GAAP Accounting standards suggests that such a lease be considered as a purchase which is reflected as such on the lessee’s balance sheet.

Recommended Lenders for Lease Finance

 

 

  • Ondeck – Ondeck is known for its prompt short term small business loans supporting small businesses. They offer SBA PPP loans, term loans and line of credit.
[element-for-review-cta id=1431 text=”A+ rating with BBB, 9.8/10 customer ratings at TrustPilot. Relaxed eligibility requirements and transparent Information for fast financing solutions”]

 

  • Lendio – A well known name in the lease funding arena, Lendio offers a simple 15-minute online application process where documents can be uploaded if required too. They have a host of loan types to choose from such as SBA loans, business acquisition loans, short term loan, commercial mortgage and so on.

Leasing Strategies to Improve Financial Stability during the COVID-19 Pandemic

The Financial Impact of COVID-19 On U.S.-BASED Small Businesses

Never before have had businesses worldwide understood the importance of being prepared for a crisis as now, during the COVID-19 pandemic. Here is how leasing could help bring financial stability to the table again:

  • Consider the sale and leaseback format of leasing for bringing some cash back by leasing out equipment and other assets purchased during the last 6- 12 months. This would allow firms to reserve cash, diversify sources of funding and take advantage of low rates.
  • You can take advantage of the low market rates by locking the lease line of credit. You can use it to cover any long-term capital projects you have planned for the coming year.
  • You should opt for a leasing company which has flexible payment options, for example provisions regarding deferred payments and so on.

Final Thoughts

As cash flow becomes scarcer in times of the pandemic, small businesses are likely to find solace in options such as lease financing to keep their small businesses running.

 

Categories
Blog

Five Useful Integrations for Inventory Management Solutions

Inventory management is an important part of any business organization; essentially, it is knowing what your business has in stock in the warehouse and exactly where it is located. Your inventory needs to be properly managed by skilled staff of the organization. In order to achieve this, businesses have moved away from the use of manual inventory taking and stock accounting to the use of integrated application packages/software. These applications automatically update the stock levels in store once a sale has been made or new stock has been purchased.

In recent times, company management has worked hard to optimize inventory control system by integrating their inventory software directly with back-office and accounting systems. A stand-alone inventory management system cannot effectively provide you with the “bigger picture,” nor can it ensure that the value of the inventory on the company’s financial books is in sync with what is actually in stock. This integration provides a competitive edge with abilities to plan effectively, execute predictably with customers and minimize labor costs and human errors associated with manual reconciliation.

Determining the right inventory management system for your business and a strategy for back-office integration requires assessing the needs of your business today and the long term future plans of your business. Following are several more than competent inventory management software systems that you, as a business owner, may want to consider.

XERO

Xero is a cloud-based software application that is used by entrepreneurs to unify different stock ledgers into a single ledger in an organization within a short space of time. This software is designed in a way that it meets the requirements of small to medium size companies, regardless of the the industry. This application also allows accountants from different locations to work on the same books of account. It carries out different functions, such as incorporation of payroll, non-current asset depreciation, accounts payable and receivable, automated banking feeds, invoicing, bank reconciliation statements, invoicing, standard business, and management reports.

It is one of the best and most useful accounting software on the market, currently, for integrating the back-office systems and the inventory management system. This software application can save your business an enormous amount of time, especially as and when your business expands.

Xero can do a lot of things, but above all, it makes sure that any changes in inventory levels are reflected in the books. For example, if you make a purchase order to a supplier, you will want that expense recorded immediately, and Xero takes care of that automatically.

This application makes accounting tasks a little less daunting even for the inexperienced user. After you sign up, the software uses a “wizard” function to ask a series of questions about your organization, which helps you to configure your account based on the answers. The application also renders assistance in case you want to migrate from a different accounting application to another. It lists each piece of information you need, and makes the migration process as seamless as possible.

For now, this application only provides email support. It has been reported, however, that user response times on tickets have been excellent. Xero has also developed an application for iOS and android devices which allows users to issue invoices right from their smartphones to their clients.

SHOPIFY

This is e-commerce software is an online shopping application which allows you to set up your products and customize your e-store. It enables buyers and seller to trade without coming in contact with each other. It is a popular e-commerce platform that allows most small and medium business owners to start, grow and manage their businesses. This application is easy to use, easy to set up, and has a lot of great visual themes.

Any business owner who wants to create a customized online store should definitely start consider Shopify as a good starting point. It is ideal for small businesses with low startup capital as it allows you to run your business online for at a price commensurate with your particular needs. With this online business, you can display and advertise your products and their prices to buyers who are interested in them. Once purchased, buyers pay for the goods online.

You can run your business from wherever you are, without the need of a physical store. Since it is an online store, once the buyer pays for the goods, the payment goes directly into your designated bank account. The software will automatically update your e-store inventory as soon as a purchase is made and the platform will alert you whenever a particular stock has been sold out.

Creating an online store on this platform is easy; it takes most new users less than 15 minutes to set up a working demo environment of a basic store for their products. The Shopify software is completely customizable, so consider your store a work in progress as you debate the look or the themes you want, and as you add products to the database.

The pricing plans for the Shopify service are very affordable, starting at $9, and capping out at about $147 a month, with the price dependent on several factors. Note that this cost does not include transaction fees.

The recent addition of 24/7 customer support is another reason Shopify has become so popular with users. Online users reviews are overwhelmingly positive and enthusiastic, so it is well worth a look.

POINT-OF-SALE (POS)

Modern day businesses now have Point-of-Sale or POS software at the place where their business is located. Most retail and wholesale businesses that make use of POS often refer to it as a “retail management system.” Having a POS application integrated with your inventory software can be a very useful tool for a small business.

POS integrations make sure that every sale made in your store is reflected in your stock levels in real time. This is valuable if you have multiple sales representatives in your organization. A POS integration ensures consistency in how your inventory is adjusted, and minimizes potential human error.

Businesses, at an ever increasing rate, are making use of POS because the selling price tag of every item have been imputed through the software in such a way that it is linked to the product code of an item. This automatically eliminates the use of price tags for products. When taking or adding stock, scanning the codes individually is no longer necessary. The inventory window updates the product price whenever there is a price change of the in-store items. Once a new batch of inventory has been entered through the membership window, the sales window is immediately updated because of the interlinking.

Similarly, every purchase is updated in the membership window, which provides comprehensive and detailed information about the remaining inventory. That information is user customizable, and can include the type of payment, goods purchased, date of purchase and accumulated points. It also can provide a comprehensive analysis of single product, such as the selling price, balance, average cost, quantity sold, description and department.

There are a lot of POS applications available on the market currently, each with their various capabilities. Vend is probably the most widely used and supported integration application preferred by small businesses and entrepreneurs for their inventory management needs. The Vend application is user- and customer-friendly and designed specifically for retail operation. It can be deployed for use across multiple stores, and it also supports a wide range of peripheral equipment, including cash drawers, label printers, receipt printers, and barcode scanners.

SHIPSTATION

If you want your business to stand out among the competition, you must be have an inventory management system which will minimize the cost of operation and maximize profits. One way to achieve that is to invest in a shipping solution system such as ShipStation. ShipStation is an advanced shipping and e-commerce solution where online businesses, especially retailers, can import their orders and manage them efficiently. Because it integrates with your inventory management system it is a very useful software to have. Though the process of fulfillment can be a tedious and time-consuming process, if you have an effective way to carry out the task, it will save you a lot of manual labor and reduce operating costs.

Once a transaction has been entered into the ShipStation system, the application calculates postage, generates a shipping label, and informs your customers that their order is on the way. Once an item has shipped, the application will sync with your inventory system so that stock levels are updated automatically. The software integrates order processing, production of shipping labels, and customer communication in an easy to use, web-based interface that integrates directly with most major mail and parcel carriers and selling platforms.

Though this application has some user-reported downsides, it is still viewed as one of the most widely accepted and supported shipping integrations on the market right now. One of the reported downsides is that its performance is often rendered less effective when order levels increase significantly, say into the tens of thousands. Given that, this software is better suited to a business which keeps order levels relatively minimal. If you have a company that deals with a high volume of orders, you should consider a desktop solution such as ShipWorks.

One of the advantages of ShipStation is its accessibility. The application is totally cloud-based, which means you don’t need to download or install the application, and yet you can access it on any device, from any part of the world, and at your own convenience. With support for more than 15 different carriers, it also offers a lot in terms of functionality and user friendly interface. ShipStation enables you to import, sort, and process your orders specific products just the way you want them.

INFLOW INVENTORY

inFlow Inventory is a desktop-based another inventory management application that can be useful in retail, as well as a whole host of industries, including e-commerce, manufacturing, healthcare, wholesale, etc. For any start up or small business looking for a free or low-cost option, inFlow Inventory is a good choice.

This software package may resemble an old-school inventory management system, but it offers plenty of modern functions and easy-to-use navigation. For example, its reorder stock button automatically generates purchase orders for products when there is no stock. Furthermore, business owners can organize their stock by location and sub-location to track their bin numbers. This application provides small businesses with the necessary and effective set of tools for inventory management; it keeps sales costs to a minimum, which consequently results in a higher ROI.

This program is easy to use and even easier to teach others how to use it. It also provides you with reports on how many items you have sold and to whom. When you take inventory, you are able to go around the store using the mobile app to acquire the data, rather than having to go back to your computer to input details of the stock.

This application, of course, is not perfect, with users complaining of additional costs for add-on services or changes. One issue is that inventory tracking is intended for use by a single person, and if you want to add another user, you have to pay for it. For some users, the inability to choose where the data is stored is a problem. With inFlow, inventory is typically stored in the cloud; users can choose to store data on a mobile device, for an additional cost, however.

Conclusion

The integration of inventory and back-office systems is crucial to the success of a complete inventory management system. The integration must be user-friendly, real-time, flexible, transparent to users, reconcilable and scalable. There are certainly benefits to integrating your inventory management system with your accounting and back-office systems; these include:

Efficiency of inventory control to make products available when requested by customers and ROI goals;

Providing inventory visibility to customers and supply chain partners; and

Showing accurate and up-to-date inventory data in the financial reports of your business.

Categories
Blog

The Multiple Advantages of Time Clock Software

Whether you own a big company, or a small business, or if you work as a manager or in a company’s HR department, the responsibility of minimizing costs and helping to grow the business is reliant on your efforts. If you are extravagant, disorganized, or if you lack managerial skills you could end up driving your profits lower, or worse, driving the business into bankruptcy.

The first step in running a successful business is to be accurate, efficient and cost-effective. How can you achieve that? With newer technological software, it’s not difficult.

There is a lot of useful business software available on the market, each of which can solve different managerial problems. One essential software that every business owner and HR department should have is Time Clock Software. As the saying goes, time is money; if you want your business to grow, you won’t want to waste precious time keeping track of your employee’s schedule, or sorting out payroll, when software can handle those tasks with ease.

What Is Time Clock Software?

Before you even start a business, you will undoubtedly be cognizant of the fact that well-utilized time and competent employees are essential in running a successful business. The question is, how can you bring the two factors together? That’s precisely where time clock software comes into play.

Time clock software is vastly different from the manual time clock. This software is cloud-based and comes as software for your PC (generally, compatible with most operating systems) or as an app for mobile devices (Android or iOS). That means, regardless of your location, or the device you are using, you will be able to oversee your staff’s activities.

With time clock software, you’ll be able to monitor and have automatically recorded:

  • When your employees start their day and when they close;
  • When they go and return from a break and/or meal times; and
  • The duration of certain individual tasks that have been assigned.

It is a win-win for both the employer and employee; for the employer, it helps improves prompt recording and sorting out payroll while for the employees, their wages are justified and accurate.

Why Every Business Needs Time Clock Software

The importance of tracking time and attendance of your employees cannot be overemphasized. For instance, how can you perfectly balance payroll according to the actual time your employees work? This software will help avoid confusion. We all understand that once your employees feel justified with their salary, they will put in more effort, but if they feel cheated, at best they may try to find a way to “even the score,” relatively speaking, or at worse, they could file a lawsuit against the company. It is impossible to accurately equate work done with the exact wage if you are using a manual time sheet, but with a good time clock software, especially if you are using software with biometric features, you will get a better estimate.

This software has a lot of advantages. First, it will give you full and accurate details of an employee’s comings and goings during their business day. Second, it will also help you save money by giving you an accurate estimate of their salary; you will know if overtime will be needed before it kicks in. Moreover, with the right time clock software, you will be able to keep track of the actual cost of labor so that calculating payroll for all of your staff would be made easier. Last but not least, with your payroll in order, it will be easier for you to draft a business plan, measure performance or draw up an annual budget.

If your business is managed with time clock software, there will be fewer mistakes and disputes. The software would serve as evidence if there are any disagreements, and you’ll be able to hold the staff accountable.

Benefits of Using a Time Clock Software

Time clock software certainly offers better solutions than the manual options. You’ll enjoy more accuracy, less cost and better public relations. Here is a list of some benefits your business would enjoy when you use time clock software.

Accuracy

Before the advent of time clock and computer software, business owners monitored the hours their employees worked manually, or else they relied on memory. These “methods” were notoriously inaccurate, often resulting in disagreements with staff. Quite often, workers who manually filled out their timesheet ”stole” time by padding the numbers. Honest workers would feel cheated if the employer’s recollection of their hours was in dispute. After the irregularities of using a manual timesheet became too frequent to ignore, many businesses move to the manual time clock, and later, the automated time clock. However, these time clocks were still not accurate enough, and time theft and “buddy punching” remained a major drawback. With the introduction of time clock software, the various loopholes that the manual time clock allowed have since been closed.

Using the time clock software, you’ll achieve near 100% accuracy. Also, there is no way the software can be manipulated since the responsibility of recording hours is automated and relatively error-free.

Help You Get More Organized

Imagine attempting to keep a timesheet for each employee for a whole year. You would have a lot of confusing paperwork to handle, which can lead to a lot of mistakes, possibly very expensive ones. Also, using the manual time clock would still require the use of punch cards, which are an unnecessary expense in the long run, not to mention, one which is harmful to the environment. With time clock software, you would not only enjoy the cost savings benefits but you’ll help the environment.

It Keeps You Up To Date

If you walk into a store without Wi-Fi or a POS machine, you may feel as though management is out of touch. Finding out that an establishment still uses a manual timesheet has a similarly disjointed feeling. Every customer wants the businesses they patronize to be up to date with technology, largely in keeping with how consumers choose to manage their lives. The point is this: don’t be left behind. For more reasons than just the obvious, it would be a smart choice for you to upgrade to time clock software.

Efficiency

Using a manual timesheet might take up to a minute a day for each employee; while this may not seem like much, by the end of the month, you’ll have discovered that a significant amount of time was wasted. At 20 minutes of wasted time a month, per employee, that number could be exponentially higher if you have a lot of employees. Imagine 200 staff members lining up to fill in their timesheet at the beginning and end of each workday. The manual time clock is only slightly better; the queue might move quicker, but that method has its own set of problems. What if an employee forgets his punch card, or punches the wrong card? It becomes difficult to keep accurate records.

The biggest benefactors of the time clock software are those in charge of HR. It would save them the stress of paperwork when calculating payroll; moreover, the entire compilation process would be free from data errors. and with time clock software, you won’t have to worry about the loss of a timesheet or a missing punch card. Essentially, the compilation of payment records would be seamless.

Costs

The cost of installing time clock software might seem expensive because the price ranges from as little as $200 to as much as $1,000 for the premium package. But, in the long run, you will be glad you did.

The use of a manual timesheet or manual time clock will end up consuming more of your time, which translates to money. Imagine the amount that would be spent on paper or the employees you’ll have to hire to calculate and compile the payroll since there would be a lot of paperwork involved. If there is a mistake, and there is a high probability of one with manual data entry, you may find you are overpaying wages or else face legal troubles if a dispute arises and your figures are challenged in court.

Let’s say you have a small office comprised of only ten employees. If you still use manual timesheets, you could spend hundreds of dollars annually. From an environmental perspective, the average office in the United States consumes about 300 pounds of paper annually; this is pure waste, and may end up harming the environment if not properly managed.

Potential Legal Issues

You may not realize how severe the shortcomings of the manual timesheet until you get involved in a legal dispute with your employee. Manual timesheet are inherently prone to errors; at a minimum, there is a 40% chance that there will be at least one error by the end of the day. For each mistake, an employee may end up being short paid; if the error continues or compounds, you may end up with a legal dispute. Adding insult to injury, if your account is audited by the IRS and they discover these errors, you could be fined for your easily avoidable mistake.

With the use of only manual timesheets, you can expect to overpay or short pay your workers from wages or overtime. In either case, in the end you may pay dearly, in one way or another. Thanks to more efficient time clock software there would no longer be room for errors. Once there is accuracy, and wages are paid satisfactorily, there will be clarity and no need for legal recourse.

Saves Time

A manual timesheet works like this; an employee inputs their details when they come on duty, and they sign out at the end of the day, clocking in and out for breaks and/or meals, as needed. These few minutes can be time-consuming and time lost for you, as the employer. The manual time clock is not much better since it still takes valuable time to verify the punch cards.

But with time clock software, the whole process is automated, making signing in and out faster and more accurate. A good system will help you keep track of when your employees begin and end their day, and helps avoid double entries. Moreover, the whole calculating process is eliminated since the software handles the task.

Mobility

Before the introduction of time clock software, the verification or sorting out of the payroll was done in one place; that made it quite a challenge to monitor the timesheet or manual time clock if employee travel was necessary. With the introduction of time clock software, mobility would not be a problem so long as the software is compatible with your device. Most time clock software will allow you to monitor the activities of your employees through text messages, email and/or GPS. If your company requires employees to travel frequently, time clock software becomes the best way to calculate their work hours off-site.

In many companies, some employees are required to have a wide range of locations, either at the office, at home or out in the field. It is nearly impossible to track your employees with a timesheet or manual time clock – all the more reason why time clock software becomes so vital. It’s more efficient, flexible and easy to manage. There are a lot of features and tools that would make tracking your employee’s activities easier. With a mobile phone and a biometric reader, you’ll be able to monitor your employees, even if they are working remotely.

Avoid Fraud

With a timesheet or time card, there is no way of actually getting the right time an employee begins or closes out their workday, thus workers can falsify their time. Worse, with a time card, they can have someone else sign in for them (aka buddy punching). Sometimes, these mistakes are unintentional, especially if workers have to rely on memory to complete the time sheet. Statistically, data has shown that companies in the United States lose close to $40 million annually as a result of timesheet errors. Buddy punching is also common among companies which still make use of a manual time clock. But with a software that has biometric fingerprint features, there is no way that an employee can manipulate the record.

Integration of Company Rules

The time clock software allows for customization; you can set the software’s parameters in line with your company’s or department’s work time and schedule. Once customized, with a notification alert, you’ll know when an employee is late, absent or goes on an unscheduled break.

Final Thoughts

Running a business has been made easier thanks to newer time clock software. In the long run, despite the initial outlay, a business owner will likely find this software is a cost saver many times over. Moreover, the software comes with a lot of useful tools and features that will help you accurately record your employees’ schedule, track their activities and organize the payroll.

Categories
Blog

Things You Should Consider Before Selecting a Restaurant POS System

In the age of patisseries, boutique coffee shops, and other eateries, having the perfect POS system is crucial. While many entrepreneurs tick off the conventional items while setting up their cafes or restaurants, most forget the importance of an efficient POS system. If you happen to be one of them, the following read is for you.

Why you need a good POS System?

A POS or Point of Sale system is like the final, and most important ingredient, in a showstopper dessert. If you can name as your assets a fantastic crew working the food line, enthusiastic staff, state of the art décor, a prime location, as well as the correct contacts in place, you’ve got most of the recipe for a successful operation. But all that means nothing if your POS fails or runs inefficiently; it’s like a beautiful chocolate souffle collapsing at the table. While a slow POS system may beget disgruntled customers, or earns you a bad reputation or negative YELP review, a good POS system, coupled with all of your other assets, all but guarantees assured clientele and long-term investments.

Considerations before you invest in a POS

Investing in a good POS system is a wise decision, but often not an easy one. You might need to plan and consider a lot of things before you actually purchase and install a POS system. Here are a few things that you might first want to consider:

What are your requirements?

Before you purchase anything, it is imperative that you gain clarity on why you want it. In this case, you must be clear about the needs that you expect the POS system will fulfill. For example, a small roadside café will very likely have different needs from a larger multi-cuisine restaurant. As an owner, you must carefully run through all aspects depending on your restaurant type.

If you run a fine dining establishment, you must ensure that you have table billing facilities as well as table reservations to avoid chaos during the lunch or dinner rush. On the other hand, if you plan on a bakery or an ice-cream shop, you must consider shelf-life management, as well as advance orders. A pub or a brewery might require you to have a strong management staff to keep a track of the liquor being spent, as well as be vigilant during “happy hour” and other weekly offers.

Do you have a fluid menu?

If you are someone who likes experimenting with both food and services and detests sticking to the same menu all year round, you will need to set up a POS system accordingly. A POS system with the option of menu flexibility not only helps your staff to feed in information quicker but also allows your customers to choose from a varied range of options.

Do you have regulars?

If you are good at what you do, your customers will invariably continue to frequent your eatery, perhaps even quite often. If such is the case, it is your responsibility not to disappoint them. If customer loyalty features high on your list, you might want to consider a POS system which can store data relating to customer history thereby giving them a more personalized experience every time they visit. Of course, this need would largely depend on where your restaurant is situated. If it is near an airport, railway station or highway, it is less likely that you will get the same customers again and again. Conversely, if you are situated well within the city, or even on Main Street in some quaint little suburb, the chances are much higher that those familiar faces will turn into your regulars.

Are you planning on developing a chain of restaurants?

While some entrepreneurs are perfectly happy with a single restaurant, others believe in expanding their venture. Thus, depending upon your future plans, you need to select your POS system carefully. For the latter, a high scale POS system is recommended that can connect all the various outlets and monitor all the functioning parts. For the former, a simple yet effective system will suffice.

Key considerations before choosing your POS system

Quick, effective and user-friendly

It is simply human nature that no one likes to wait, especially not for food, and most especially when you are hungry. Losing a customer as a result of delayed service is probably the biggest nightmare for any restaurant owner.

One of the key features of a good POS system is its speed and effectiveness. A faster system ensures faster service and happy customers. With more efficient software, customers are accommodated more easily and attended to at a faster rate. Provided all the employees, including kitchen and wait staff, are well acquainted with the software (which should be as user-friendly as possible), orders, messages and special instructions can be passed on more quickly.

Inventory track management

If you are already running a restaurant, you are quite aware of the hassles of tracking inventory. Which ingredients do you use and need to replenish most frequently? When do you have to buy the next ingredient? Are your perishable goods still safe to consume? The worries seem endless. But what if you found a technology that takes care of these hassles for you? Currently, there are quite a few POS systems that offer real-time inventory management. Besides keeping a tab on which ingredients are used the most and how much is used per day, they will also provide reminders about placing orders at the market; all you have to do is set an alarm! Furthermore, many systems today are also set up to re-order ingredients automatically and keep track of those items and their costs.

Credit card processing

In the age of plastic money and cashless transactions, your effort should be to help customers by providing a POS system that integrates with all credit card processors. Please remember, not all credit card processors integrate with all POS systems. While the majority of credit card processors will accept Visa and MasterCard, they may not accept American Express, Discover or Diners Club, which may result in your loss of a customer. Credit card transactions outside the POS system not only delay the entire service process but also becomes too cumbersome for the staff member having to deal with it. If you already have an existing POS system, make sure it is well integrated with your credit card processor.

Mobile payments

A few modern POS systems also have mobile payment facility integrated. If you run a small café or restaurant that targets the young college-going crowd, this is one feature you might want to consider. The younger generation today travels cashless; they use several online money apps like Paytm, Google Pay, Phone Pay and so on. If you wish to cater to their needs and interests, you should look for EMV and NFC compatibility in your POS system.

All modes of payment

A good POS systems should be able to accommodate all forms of payment, i.e. cash, debit cards, credit cards, and even payment by check. They should also accept EBT and EMV chip cards. By installing a POS system like this, you automatically increase the chances of a larger number of customers visiting and revisiting your restaurant.

Snapshots

An ideal POS system would be one that can give you a brief or summary about all aspects of a restaurant. The POS would be able to maintain a customer database, which would include favorite dishes, dislikes and food allergies, as well as calculating maintenance cost, etc. Essentially, it should give you a snapshot view of your venture. Getting a POS system that can provide this feature is advisable to maintain the smooth functioning of your restaurant business.

Room for customization and alterations

We live in an ever-changing world; trends change, people change, desires and wishes change, tastes change and so on. If you are planning on venturing into a long-term enterprise, make sure the POS system that you install is one which is open to customizations and changes according to customer needs and/or trends.

Back up and support

Even if you purchased the best POS system available, you will need to be prepared with a backup plan. After all, machines and technology will falter at some point in time; it could be a mechanical malfunction, a power outage, or some other unexpected emergency. Most of the time, there is little you can do to stop it. However, if it relates to your POS, what you can do is ensure that the after-purchase customer service provides you with a live support option. A reliable software company should guarantee you immediate and regular service.

Mobile reporting and live data tracking

The number of orders dished out in a day, as well as tables occupied, and the total number of customers at the restaurant at any given time are details that should be readily available to you. For this to happen, your POS system must be enabled with live data tracking. With this facility in place, you can get instant live information about your restaurant on your mobile phone without the need to visit the restaurant.

Offline reporting

Internet loss or power snafus are not unheard of in the present world. To combat this, choose a POS system that has offline reporting as one of its features. Thus, even with a power failure and, consequently, an internet shutdown, your POS system can work just fine. Also, when the power comes back, it should have the ability to automatically update all of the offline data.

Marketing

Your restaurant’s future largely depends on how many people know about its existence. Along with providing good service, you need to learn the art of marketing. An above average POS system will integrate customer relationship management into its software, and using this, you can be in touch with all your customers and keep them abreast of the latest offers and discounts.

Feedback management

With a good POS system, you can track all your customers’ feedback using their integrated system. With feedback management software, you can hand your tablet or smartphone to the customer for more constructive feedback, which is far more valuable than the generic questions on paper surveys.

Security issues

Your POS system is essentially software that works using the internet. Given all of the risks with using the internet, e.g. viruses, cyberattacks, hacking, etc., it is advisable to buy and install a POS that has PCI compliance as well as a good antivirus program. Researches shows that most cyberattacks occur against less-protected venues, such as small eateries and businesses. Since your POS system has all of your customers’ history fed into it, it would be a breach of their trust if you allowed that data to be exposed to cyberbullies and attacks. Further, to ensure that all of the data that is stored into your POS system remains safe and protected, you should consider getting encryption software, especially if it is a cloud-based POS system.

To conclude

A good POS system is one that not only allows you to closely monitor all aspects of your restaurant but ensures a smooth, hassle-free yet effective management. The restaurant business is becoming more and more competitive with every passing day and, simply stated, it is no longer enough for you to provide just good food and a nice atmosphere.

Long gone are the days when a POS system was used merely for printing checks and receipts. Customers look for an overall positive experience right from the moment they book a table to the time they leave the restaurant. It is your responsibility to provide that experience.

There are multiple POS systems in the market today, each promising more features than the other. Some of the popular POS systems available are Toast, Lightspeed Restaurant, Clover, Square for Restaurants, Shopkeep and so on. Also remember, the IOS POS systems are the latest to have hit the market and promises to stay around for some time.

With a larger population going out to eat regularly and technology advancing with every passing day, it is important that your POS system is adept with every modern feature available in the market today. Having said that, it is equally important for you to understand that it is not the number of features available but the right features that meet your needs. Accordingly, you can visit their websites online and decide on the best one for you.

Categories
Blog

Seven of the Best Project Management Tools Available Today

Project management tools are at the heart of any efficient team. Chat, task delegation, high-level planning, analytics, scheduling – an excellent project management tool combines them all. Stellar tools lead to improved productivity while ones that are lacking are worse than no project management tool at all.

With the sheer number of options in the market, picking the right project management tool can seem overwhelming. We’re here to ease your worries and provide you with the information you need to make it through the decision process.

Below are seven of the best project management tools you should consider for your business (in no particular order). Whether you’re looking for a basic to-do list or sophisticated workflow analytics, we’re sure you’ll find it on this list.

Asana

Asana is a premier project management tool that includes task creation and delegation, kanban boards, project scheduling, team objectives, and over 100 integrations.

With so many features, you may find the interface intimidating at first glance. Fortunately, the Asana team has created platform templates for over 50 types of organizations to give you a solid foundation to start. From marketing and design to engineering and human resources – there’s probably a template for your specific team.

Asana contains two project management features that stand out against the competition. The first, Portfolios, is akin to a dashboard for all of your team’s initiatives. You can track the progress of high-level goals, see which team members are at risk of missing deadlines, and highlight what tasks are overdue in one, convenient location.

The second feature, Workload, is one of Asana’s most recent additions. It provides you with a visualization of the bandwidth of each team member. If one person appears to be juggling too many tasks, you can quickly re-delegate some of the work to someone else.

Available Platforms: Online, Android iOS

Pricing

Asana implements a freemium pricing model in which your monthly cost increases as you add additional features and users. Non-enterprise plans range from free to $19.99 per user each month. Unfortunately, Portfolios and Workloads are only available in the Premium ($19.99) tier.

LiquidPlanner

LiquidPlanner is a much more data-focused project management tool than many of the other platforms on this list.

Like Asana, it shows you the workload of each team member. However, it also generates business insights based on that workload data. It shows you the number of hours each team member has available and highlights the people that may miss a deadline because they have too many tasks.

Utilizing workload data further, LiquidPlanner automatically adjusts estimates for task completion dates when you shift resources around and re-prioritize tasks.

For data-driven teams, LiquidPlanner contains a suite of analytical options to measure the success of your organization. You can build reports that detail burndowns, any date drifting, task estimations, and baseline analytics, among many other attributes. And, because LiquidPlanner contains time-tracking and budgeting software, cost and profit reports are at your fingertips as well.

Available Platforms: Online

Pricing

In comparison to other project management tools, LiquidPlanner is on the expensive side. The platform’s Professional offering is $45 per user per month, with a minimum of five users. The Enterprise tier costs $69 per user per month and also implements a five-user minimum. Both options require an annual contract.

Fortunately, LiquidPlanner offers a free 14-day trial, so you can try out the platform before committing to a year of services.

Basecamp

With a 2004 launch and over 3,000,000 customers, Basecamp is one of the most established companies in the project management tools space. The platform combines the functionality that you would find in other, distinct productivity apps (such as to-do lists, messaging, file storage, and scheduling) into a single location.

If your team works with clients regularly, you should give Basecamp a shot. The platform gives you the ability to share certain information with clients and, in turn, forward emails from clients to the Basecamp platform.

To help keep your team on schedule, the Basecamp interface includes Hill Charts. Unique to Basecamp, these charts visualize a project’s status from the “figuring things out” stage through “making things happen” and completion.

Additionally, Basecamp includes reports to give you a high-level overview of tasks, deadlines, and delegations across teams. You can also view which tasks are overdue and what tasks team members have recently been working on.

Available Platforms: Online, Desktop, Android, iOS

Pricing

Basecamp pricing is simple. The company charges a flat $99 per month – no matter how many people are on your team. Whether your business contains one employee or 100 employees, you’ll pay a $99 monthly subscription fee.

Basecamp comes with a free 30-day trial period as well.

Zoho

Zoho is a behemoth in the business software space, offering a different tool for almost every aspect of your business. Regarding project management, though, Zoho Projects is what you’re looking for.

Using Zoho Projects, you can plot out Gantt charts, automate task workflows, and record when tasks deviate from their typical completion times.

And while Zoho supports all of the typical project management activities you would expect, the tool also contains features specific to software development. It integrates with GitHub and Bitbucket with code tracking capabilities as well as includes a system to record and track issues.

Other than Projects, the Zoho team has also created Sprints, a project management tool specifically for agile development teams.

Zoho’s most significant strength, though, is the ecosystem with which any Zoho product can integrate. Projects, for instance, integrates with Zoho Invoice, enabling you to track team member hours and create invoices from those hours automatically.

Available Platforms: Online, Android, iOS

Pricing

Zoho Projects cost anywhere from $150 to thousands of dollars a year, depending on your team size and level of functionality. If you have a small team (five people or less), Zoho offers a free Projects plan with limited features.

As with most project management tools, Zoho offers a free 10-day trial.

Monday.com

Known for its clean design and simple-to-use interface, Monday.com has the stamp of approval from several respectable organizations – WeWork, Discovery Channel, and Philips, to name a few. The project management tool supplies you with an almost entirely customizable interface that you can meld to any team.

You can quickly switch between several views, including calendar, chart, files, kanban, timeline, and even maps. The platform shows you weekly overviews as well, so you can easily stay in the know about multiple teams and tasks.

Monday.com also provides editable automations that execute after the specific project tasks you set. For example, you could set up an automation in which your team is notified whenever a particular job becomes overdue.

Similar to Asana, Monday.com offers a host of templates for many distinct business use-cases. Additionally, the platform integrates with the majority of the top productivity tools like Slack, Zapier, Google Drive, and even Trello.

Available Platforms: Online, Android, iOS

Pricing

Monday.com pricing contains three tiers that scale as you add more users. A simple five user subscription is $39 per month for the Basic level, $49 per month for Standard, and $79 per month for Pro.

The Monday.com project management tool additionally offers a seven-day free trial.

Trello

What started as a simple to-do list app has now grown into a robust project management tool. Once again, Trello receives validation from credible companies such as Google, National Geographic, and Kickstarter.

The crux of Trello resides in its Kanban-style boards, comprising cards you utilize to plan projects and track their progress. Within these cards, you’re able to set due dates, add tags, delegate tasks to specific team members, and converse about its status.

The basis of Trello may seem basic, but the platform contains ample “power-ups” which provide layers upon layers of additional functionality. Some power-ups integrate with other tools like Slack and Survey Monkey, while others build customized solutions directly into your Trello boards.

Trello works well for smaller teams and start-ups that don’t need the sometimes overbearing amount of analytics you find in certain competitors. To help you get started, the Trello team has composed a series of playbooks (i.e., templates) for boards that tend to work well for specific team types.

Available Platforms: Online, Android, iOS

Pricing

Trello costs range from free for basic functionality to around $20 per user per month for its enterprise solution. Using a paid plan grants you larger file upload availability, unlimited team boards, more comprehensive automations, and an abundance of administrative features, among several more benefits.

Microsoft Teams

On the surface, Microsoft Teams looks like a standard chat platform. However, this project management tool contains more than meets the eye.

It’s clear that Microsoft Teams values communication above all else, providing numerous options to talk with team members on the platform. You can reach out via text chat, audio calling, and video conferencing.

Beyond standard communication, though, Microsoft Teams provides you with scheduling capabilities (for meetings and projects), file storage, and the ability to create, delegate, and track tasks.

As you can imagine, Microsoft Teams integrates seamlessly with the suite of Microsoft products. This integration means that you and the rest of your team can edit Word documents and spreadsheets simultaneously, for example, directly in the Microsoft Teams app.

Available Platforms: Online, Desktop, Android, iOS, Windows Phone

Pricing

Meant for larger organizations, Microsoft Teams offers three pricing tiers – Free, Office 365 Business Premium ($12.50 per user per month), and Office 365 E3 ($20.00 per user per month).

The Free plan includes basic functionality and has a 300 user limit. The Office 365 Business Premium plan also has a 300 user maximum but comes with substantially more features. It includes meeting scheduling and recording, additional support, and advanced reporting, whereas the Free plan does not.

If you choose the Office 365 E3 option, you won’t have a restriction on the number of users, and you’ll gain even more functionality.

Picking the Right Project Management Tool

Every project management tool has its strengths, and uncoincidentally, each has a few weaknesses. Fortunately for you, most, if not all, have a free offering of which you should take advantage. Try out each platform you’re considering for at least an hour to get a feel for where it excels and which areas it’s lacking.

It’s likely your team will be using this project management tool every day. So, it’s worthwhile to spend a little time now picking the perfect tool to avoid a host of headaches down the road.

Categories
Blog

11 Things You Need To Know About Retail Inventory Management

The dream of every business owner is to grow his business. Developing a successful business is not an easy task; it requires careful nurturing and proper management. One basic strategy that will help your business grow is an appropriately managed inventory.

If you own a retail store, or if you plan to own one, you should know that retailing is all about selling goods. But equal to that, it is about ensuring that your inventory is replaced in a timely manner. Otherwise, your customers will feel its absence and look elsewhere for the desired product.

Your inventories have to be in order if you want to keep your customers. This means adequate supplies of stock, within easy reach for replenishment as soon as they are needed.

What is Inventory Management?

Inventories are your goods in-store; they serve as a backup to the products on the shelf. Every retail business is expected to have inventory in a warehouse. Once goods on the shelf are purchased, the goods would be replenished with inventory from the warehouse.

Proper inventory management is essential. Retailers need to keep a record of their inventory and ensure they are within reach, and that they don’t run out. Retail inventory management keeps your retail business in order. It involves a number of steps, from placing an order for new supplies, to arranging the delivery of new products, labeling them and supplying them as and when they are needed.

There are two methods of inventory management; the manual method and the electronic method.

The manual process is more stressful and tedious. While it may be appropriate for small, mom-and-pop type establishments, it is almost impossible to use the manual method for big stores with a huge inventory of goods and products.

Before the introduction of the electronic methods, like POS and other inventory software, these bigger retail stores generally had their own way of manually maintaining daily records and tracking sales.

Using the electronic methods, it is far easier to monitor and manage inventory, saving both time and your sanity. Electronic methods are very easy to use; you’ll be able to keep track of your stock automatically and updates would take only a few minutes without the need to calculate complex algorithms.

Why Inventory Management?

The business world has changed significantly, especially in the retail sector. There is more competition than ever before, and to keep up with competitors, you need to build a strong customer base. Of course, that means every customer should be considered invaluable. One mistake can mean a lost customer, so you have to be flawless with your delivery. If a customer can’t find what he is looking for in your store, he will go elsewhere. You shouldn’t take chances; you need to make sure your goods are always available. The moment a customer goes to your competitor to get a product because it’s not available at your store, there’s a very big chance he might not return.

One way of keeping your customers happy is by making goods readily available. To achieve this, you need proper inventory management, to make a projection of needed goods before they are depleted, place a request for new supply, then sort them out and make them available for sale.

Whether you are starting up a new retail business or just want to improve your business strategy these are 11 of the most important things you need to know about managing retail inventory.

1. Know Your Customers

Regardless of the type of business, the only way to sell is to know your customers, understand how they think and their possible choices. This will help you satisfy their needs, perhaps even before they recognize them. As a retailer, you can’t just store inventory randomly. They should be stored based upon needs; products that sell fast should have more inventory in-store, and they should be readily available. Conversely, stocks that don’t have rapid turnover shouldn’t occupy valuable space.

Don’t hesitate to discriminate in this regard; those items that sell more should receive more attention, while low selling items should be given little attention.

2. Keep Accurate Records

If your records are accurately maintained, it will make inventory management much easier. To maintain an accurate accounting of your inventory, ensure records are checked regularly. Keeping an accurate record might not be easy, but it’s worth the effort. It is far too easy to make a mistake, but even a little mistake can cause serious losses and reduce your profit margin. If caught early enough, with regular scrutiny, the mistake can be rectified before it has a chance to compound, which is the reason why you need to keep painstakingly accurate records.

Retailers who use manual inventory management are more vulnerable to little mistakes. Once a mistake is detected, retailers spend valuable time trying to correct it. On the other hand, if the mistake goes unnoticed, their bottom line can be negatively impacted. Retailers will find that the appropriate use of inventory software electronic devices like a barcode scanner and Electronic Data Interchange (EDI) will help them minimize errors.

3. Understand Your Inventory

You can’t just replenish your inventory haphazardly; that can lead to complications and confusion.

First, not all items sell equally, so understanding your inventory is an excellent way to start. This will help you know which stock needs to be replaced and when.

Before you make any new purchase, you first need to know exactly what you have in store. Once you notice a product has little stock, you can arrange for immediate replacement. Those products which have adequate supplies can wait until the stock is more depleted (with the exception of high demand items). Essential products with high sales should be replaced based on demand record.

Goods which have seasonality are also a factor. There might be high demand during a particular season or holiday. During the period when there is high demand, you can increase the inventory stock. During the period of low seasonal demand, when you don’t need much supply, you can decrease your inventory. For example, if your retail store sells Christmas trees, then from late November or early December you should have a lot of inventory in the store. Afterward, there will likely be no demand from customers, so there will be no need for inventory in-store taking up valuable space.

4. Ensure Accurate Delivery

Once new stocks arrive from the supplier, you should make sure they are exactly what you ordered; both the quantity and quality of stock should be checked. If there is a mistake from the supplier, you can ask for an adjustment. You will be at a loss if an error goes unnoticed. Say you have ordered 100 packs of a product, and only 88 packs were delivered. If the 12 missing packs go unnoticed, you’ll have a shortage; moreover, you will have paid for those goods which will now never be sold. Don’t just assume your suppliers will provide the accurate numbers of stock that you ordered. They also make mistakes.

5. Prompt Inventory Management Delivery

The entire management process needs to be as fast as possible as any delay can affect your business. For example, if your inventory arrives late, and there is a demand for new stock from your customers you will be unable to meet their needs and they may go elsewhere rather than wait. If you don’t readily recognize that a particular inventory needs replacement, it can slow down the entire sales process, as well.

Failure to request goods needing to be replenished promptly, or a delay in shipment by suppliers, is simply bad for business as you will find yourself behind schedule. Managing your inventory needs prompt attention so your goods can be replaced once they are depleted from the store’s shelves. If there is prompt management of your inventory, your trade process will be smooth, your customers will be happy, and your business will grow.

If you want to make the process faster, then you need quality management tools. Inventory management tools will help you monitor the entire process.

6. Project Future Sales

If you are good at projecting your store’s demand for inventory, it will help the entire inventory management process. You don’t have to wait until you run out of stock before you request new inventory. You can use the previous sales record to place an order for further shipment. For example, say you sell two products, let’s call them product A and product B. If you sold 50 units of product A and 30 units of product B each month for the past three months, you can accurately reorder these products (50 units of product A and 30 units of product B) without first running out of stock.

There are several benefits that occur when you use the previous sales data to make the order; you will never run out of stock, you will have enough time to sort them before they are needed by customers, and you’ll be able to distinguish your high selling products from your low selling products.

7. Take Stock Regularly

You will need to take stock on a regular basis to ensure that everything is in place. There are some little details that you may have overlooked, which can have a negative impact on sales and complicate the inventory management process. With regular stock taking, you’ll be able to find any glitch in the system that ordinarily would have gone unnoticed.

When these glitches are spotted early enough, you’ll be able to find a solution before the error compounds. Regular stocktaking will also help you make informed decisions as regards project demand.

8. Hire Competent and Trustworthy Employees

Data shows that, on an annual basis, retailers lose millions of dollars because of employees. Those losses can be attributed to employee mismanagement, inaccurate stocktaking, and even theft. It’s no longer news that employees steal from the warehouse; most times, they manipulate the figures, so you won’t even know you are being robbed.

In every business, efficient staff affects the business positively, while incompetent staff affects the business negatively. Being efficient is one thing; being trustworthy is another. Theft from employees is a major drawback to retailing. Before hiring, conduct a thorough background check on each potential employee. During your day-to-day activities, ensure that your business is properly surveilled to keep illegal activity minimized.

9. Automate Your Inventory Management Process

The whole retail inventory management system starts with placing new orders. The entire process needs to be handled efficiently; an automated process will save time and improve accuracy. If your store is small, and you are handling the process yourself, you should master the entire inventory management process and make each process automatic. The same would apply to your staff if you run a big retailing company. Your employees shouldn’t need to be told when to place new orders, or what to do when new inventories get shipped in. They should be experts in the roles that they play. Every staff should understand each procedure, and if you have enough staff, you can delegate roles to a select number of employees.

10. Recognizing the Importance of Inventory Management Software

Using the latest technologies will help you boost your inventory management process. There is an abundance of software available; the goal is to find the one most suitable for your business. Before you begin to shop for inventory management software, consider that good inventory management software should be able to help forecast sales, monitor stocktaking, and give you instant information on orders and sales. It also should be able to monitor staff activities and reduce employee theft. If you own a big store, manual inventory management will be challenging, so consider using inventory software and tools that would make the management process easier.

11. Label Your Stock

As part of your inventory management process, ensure each product is labeled correctly. Labeling should include the product name, quantity, and other essential information like supplier and date. Labeling will make identification easier, and you’ll be able to keep records better. Employee theft will also be reduced, especially if you use barcode labeling.

Conclusion

There are three factors that determine excellent retail inventory management; your technique, your employees, and the technologies that you adopt. If you fail to manage your inventory correctly, there’s a higher likelihood that you will lose your customer base. Once that happens, it will be difficult for your business to survive.

Customers are fickle; one wrong move, and you might lose them. If you don’t have the product they want to buy, they may move right on to the next store which carries that product, regardless of their loyalty. All you need to do is make sure every product is readily available. How can you ensure this? The answer is to manage your inventory correctly. The aforementioned tips will help you with all the information you need.

Never forget that every customer should be treated like a valuable commodity, and every sale you fail to make (due to the absence of stock) can affect your business negatively in the long run.

If you have questions or comments about what you’ve read, feel free to add them in the comments section below.

Categories
Blog

Understanding the Ins and Outs of a Point of Sale (POS) System

What Is the Point of Sale?

The point of sale is simply the place where transactions between you and your customers occur. Your point of sale may be in-person, at a stand-alone terminal, or reside online. You may have multiple points of sale.

The point of sale is one of the most critical parts of any business. It not only includes payment processing but also contains sales reporting as well as the management of inventory, employees, and customer relationships, among other business-specific functions.

How Does a Point of Sale (POS) System Work?

At its most basic, a point of sale (POS) system combines all aspects of your business’s point of sale into one, convenient location. What the smartphone does for communication, POS systems do for business processes. Often, these systems connect a hardware component, like a sales terminal, to a software component for streamlined management.

Let’s examine the role that a POS system plays within each point of sale activity that we touched on above.

Payment Processing

The most well-known, and arguably most important, function of a POS system is processing payments. You can’t make any sales without being able to accept money from customers, right?

As you can imagine, POS systems differ in the type of payment processing they support. Simple, brick-and-mortar systems may only accept magstripe card purchases via swiping. Other, more advanced systems support a wide variety of payments, including both magstripe (swipe) and chip (insert) cards, mobile payments like Apple or Google Pay, and even cryptocurrency (e.g., Bitcoin) transactions.

If you’re strictly an e-commerce business, you need to find a POS system that supports online purchases. It’s also essential to evaluate the payment experience of the systems you’re considering. You’d hate to lose customers that leave your site in frustration because of a problematic payment process.

For service businesses, your POS system should include tipping capabilities. Most have customizable functionality, so they can accommodate whichever tipping structure your company has.

Try to gain an understanding of the payment methods that your customers prefer. The more payment options available on your POS system, the better the experience your customers have. But although more payment methods typically lead to more sales, supporting them can fetch a higher price tag as well.

Sales Reporting

Beyond payment processing, a reputable POS system provides you with sales reporting. Once again, the level of reporting varies from provider to provider.

When evaluating potential POS systems, ensure that, at a minimum, you choose one that monitors and provides some analysis on your overall sales. Reporting sales through your POS system saves you bookkeeping costs and allows you to keep tabs on the health of your business.

A more sophisticated POS system segments sales by employee, time of day, and the type of item, among with other helpful segmentations and enables you to drill down into those distinct data points. It’s amazing the insights you can discover when analyzing even a small subset of your sales data.

Ideally, you want a POS system that accurately records your sales data and displays it in an easy-to-digest format. Even better, it should allow you to customize the data you collect as well as how you view that data. When evaluating your options, take advantage of the demo products that companies provide.

Inventory Management

Tying in tightly with a POS system’s sales reporting is its ability to manage inventory. Once you sell an item, a robust POS system will automatically update your inventory records to reflect the sale.

Most POS systems allow you to create a directory for your inventory, specifying item SKUs, descriptions, and quantities across locations. From there, they digitally track which items you sell and can even order new products automatically when the stock runs low.

For some businesses, however, automatically ordering stock isn’t ideal. If automatic orders don’t work well for you, find a POS system that at least sends you reminders when inventory is low.

Either way, you should check for a system that integrate with your vendors. The more opportunities to connect, the more manageable everyone’s job becomes.

Employee Management

Moving away from the sales aspects of the point of sale, the ability to manage employees is another beneficial feature of POS systems.

Several systems include employee scheduling and hour tracking capabilities. You set and change their schedules online or through the sales terminal, and employees stay notified through the same means. Usually, employees can clock in and out through a POS system as well, reducing the time it takes to calculate pay.

Now, here’s where the value of a great POS system really kicks in. Because employees are clocking in, and you’re tracking tips, through a POS system, it’s a breeze to reconcile those tips when they clock out. Additionally, a POS system enables you to more easily track sales numbers for individual employees since all the data is passing through the same network.

Customer Relationship Management (CRM)

The final piece of a POS system revolves around customer relationship management (CRM). Using a POS system, you can connect each sale with the respective customer. From there, there’s a nearly endless amount of business activities you can perform.

Through a CRM component, you can use sales and customer data to more effectively target your marketing. For example, you could send promotions to your top customers through a customer loyalty program. Or, when a customer buys a particular product, like shampoo, for instance, you could then re-target ads to them for complimentary products, like conditioner.

Even something as small as collecting customers’ birthdays and sending them specialty deals to celebrate has an enormous impact on customer satisfaction and retention.

Once again, look into whether the POS systems you’re evaluating integrate with any email marketing or customer rewards tools that you already, or plan to, use.

The Top POS Systems Today

Square POS System

The Square POS system is one of the most popular in the industry today. It doesn’t include the bells and whistles of some competitors, but it’s affordable and straightforward to use.

Square gives you a dashboard that shows sales statistics, customer profiles, employees, sales locations, and inventory all in one place.

If you operate a restaurant, retail space, or appointment-based business, Square has created specialized platforms for you.

Price

Square is a relatively low-cost option compared to other POS systems. The company doesn’t charge any monthly fees. Instead, you pay a 2.75% processing fee on each transaction.

Regarding hardware, you can order the Square magstripe reader for free. If you want to accept contactless and chip payments as well, you can purchase the Square Reader for $199.

Additional features such as employee management or customer loyalty programs add on an extra $5 to $45 per month.

Who Square is for: The frugal business owner who doesn’t need anything fancy.

Shopify POS System

As you could probably guess, the Shopify POS system favors retail businesses. It supports payments through smartphones and tablets, so there’s no need to buy a sales terminal if you’re on a budget.

Shopify also includes a communication tool, Timeline, to make retail teams more efficient. And to help with inventory management, the POS system supports product barcode scanning.

Price

Shopify offers three price options, each with distinct monthly payments and processing fees. The lowest tier, Basic, will run you $29 per month and supports up to two staff accounts. Processing fees with a Basic account are 2.7% per transaction on in-store credit card payments and 2.9% plus 30 cents for online credit card transactions.

At the highest tier, Advanced, you’ll pay $299 per month and receive support for up to 15 staff accounts. Additionally, your processing fees fall to 2.4% per in-store transaction and 2.4% plus 30 cents for online ones.

Who Shopify is for: The retail owner who’s trying to keep expenses low while expanding.

Clover POS System

Clover supplies a more comprehensive POS offering than the previous two companies. Beyond the normal POS functions, Clover provides financial solutions, virtual terminals, and gift card support.

Most importantly, though, is the sheer number of third-party apps with which Clover can integrate. The Clover App Market contains numerous apps that improve customer engagement, online sales, inventory management, and scheduling, among many other business functions.

Price

As you would imagine, Clover’s pricing varies significantly depending on the hardware device that you choose. Your cheapest option, Go, has a $69 price tag while the most costly hardware, Station, costs $1,199.

Hardware costs aside, Clover is still on the expensive side. On top of the hardware price, Clover charges a monthly fee for its software and processing fees as well.

The less expensive Register Lite plan costs $14 per month alongside processing fees of 2.7% plus 10 cents per transaction in-store and 3.2% plus 10 cents per transaction online. The Register plan costs $29 per month but brings your in-store processing rate down to 2.3% plus 10 cents.

Who Clover is for: The business owner who needs several integrations to the tools that he or she is already using.

Intuit Quickbooks POS System

Intuit Quickbooks is one of the most established players in the POS space. As such, it has a nearly endless list of offerings. Payment processing, inventory management, customer engagement, staffing, reporting – you get it all. On top of that, every POS system integrates with Quickbooks tax and bookkeeping software.

The company also provides distinct systems for industries like sporting goods, furniture, home improvement, and apparel alongside its standard offering.

Price

Like Clover, Intuit Quickbooks is on the high-end of the price scale. It charges separate fees for POS hardware, software, and payment processing components.

At the time of this writing, the Intuit Quickbooks card reader costs $99, although the regular price is much higher at $349. The company also sells other, more traditional hardware components such as receipt printers, cash drawers, and pole displays.

Intuit Quickbooks’ POS software costs a one-time fee, ranging from $1,200 to almost $2,000 depending on the amount of functionality.

Finally, Intuit Quickbooks charges a consistent 2.7% on all swipe or insert card transactions. For $19.95 per month, you can reduce this rate to 2.3% plus 25 cents per transaction.

Who Intuit Quickbooks is for: The old-school business owner who’s willing to pay a little more for a stellar brand reputation.

Shopkeep POS System

As the name implies, Shopkeep specializes in iPad-operated, in-store POS systems, primarily servicing retail, quick-service, restaurant, and bar businesses. The company prides itself on its system’s ease-of-use and ample customer support. It provides 24/7 customer support every day of the year and offers personalized onboarding plans.

As with other retail-focused POS systems, Shopkeep includes features for inventory management (label printing, reordering), BackOffice (staffing, customer management), and sales (split payments, returns). If Shopkeep doesn’t have an out-of-the-box feature you need, it may be available from one of its numerous software integrations.

Price

Shopkeep implements a custom pricing model for each business. So you’ll have to contact the company to receive a quote. For payment services, however, it doesn’t require a contract, and there is no cancellation fee. The company also offers a $500 guarantee that it will match or beat the rate of any competitors.

Who Shopkeep is for: The brick-and-mortar merchant who may feel uncomfortable around digital POS systems.

Lightspeed POS System

Lightspeed’s POS system revolves around retail businesses and restaurants. But although the company focuses on in-person storefronts, it provides an e-commerce platform as well.

On the retail side, you’ve got a comprehensive list of inventory management tools such as layaways, special orders, stock tracking, and sales reporting across stores.

For restaurants, Lightspeed gives you custom floor plans, customizable menus, and several options for table billing. Additionally, Lightspeed Restaurants contains an offline mode, so you’re still able to conduct business even if your Internet is down.

Lightspeed also offers a distinct loyalty platform, Lightspeed Loyalty, that keeps track of customer spending habits and enables you to engage them through loyalty programs and behavior insights.

Price

Similar to many competitors, Lightspeed’s pricing depends on the size of your business. The Retail POS system generally starts around $99 per month while the Restaurant alternative is slightly less at $69 per month. Payments on both platforms will cost you 2.6% plus 10 cents per transaction.

The eCommerce POS system costs $59 per month with a payment processing rate of 2.6% plus 30 cents per transaction.

Lightspeed Loyalty starts at $49 per month for businesses using the Restaurant POS and $59 per month if you use the Retail POS system.

Who Lightspeed is for: The small- to medium-sized business in the retail or restaurant industry.

Revel POS System

Revel offers a POS product for retail stores, but it’s clear that this company is restaurant-focused. The Revel POS includes features relating to kitchen management, menu building, ingredient-level inventory tracking, and delivery management to help improve the processes of all kinds of restaurants.

The Revel team has also uniquely created a POS system with features specific to pizzerias. Menus include categories and subcategories for pizza-related dishes, online ordering allows for pie customizations, and the delivery management system tracks order times as well as plots routes for drivers.

Other features of the Revel POS system involve mobile order taking, QuickBooks integration, and flexible payment options.

Price

Revel contains three primary charges of which you should be aware. The first, a software fee, starts at $99 per month for each terminal you implement. It may seem pricey, but this fee includes almost all of the POS system features like inventory management, reporting and analytics, employee management, and the CRM component.

Revel charges a flat processing fee; however, you need to contact the company to receive a quote. Finally, Revel offers onboarding support, starting at $649.

Who Revel is for: The restaurant entrepreneur, specifically someone with meticulous operations and multiple locations.

Vend POS System

Vend creates POS systems that are primarily for retail shops. Although you technically could use its software for restaurants, you may find some of the functionality lacking. On a positive note, Vend is well-trusted in the retail community with over 20,000 clients, including Disney and Ecco.

If there’s a particular piece of retail functionality you’re looking for, Vend likely offers it. Other than the standard features we’ve talked about ad nauseam at this point, Vend also provides you with the ability to add discounts and notes to line items, create custom receipts, sync customers across stores, and produce end of day reports as well as employee performance reviews.

Price

The Lite Vend POS system costs $99 per month and includes the POS software, inventory management, 24/7 support, reporting, and Xero accounting integration. For $30 more each month, you can upgrade to the Pro system, giving you additional access to advanced analytics, promotions and gift cards, APIs, and a suite of add-ons.

Vend also sells POS hardware and offers a payment solution as well as onboarding help for an additional cost.

Who Vend is for: The small-business retail store interested in a cost-effective option.

Choosing a POS System

The full functionality of each of these systems expands far beyond the scope of this article. And there are several excellent POS systems that we weren’t able to include.

Use this guide as a foundation, but in the end, it’s best to do your own POS research and figure out which system fits your needs best.