913-234-5291
get started
Menu

American Business Systems discovers a system for startup and growth: factoring

 

American Business Systems (ABS) is an employee administration company that relieves businesses from the burden of many administrative duties, including payroll administration, risk management, HR advisory services, employee benefits and staffing/recruiting. When a company outsources to ABS, they save time and can focus more on running their business.

ABS’s enviable place in the Johnson County, Kansas business community today is light years from the company’s first year in business in 2014. Like many startups, it was traumatic and with no guarantee of success. And that’s where our story begins.

ABS’s first customer

After years in the industry and achieving partner status in a small consulting business, Cory Beaver and Moses Muro wanted to strike out on their own. They landed their first contract and everything looked good, from the profit margins to the low overhead. Between them, Cory and Moses could manage their first customer and grow from there. That’s when ABS hit roadblocks.

Not enough cash reserves existed to pay ABS’s growing payroll demands as they added customers and increased the numbers of temporary workers they were placing. They weren’t in a position to bankroll the startup themselves, so they looked into a line of credit from their bank.

“We love our bank,” said Cory. “But sometimes they can’t move at the same speed as our business does.”

ABS was living every entrepreneur’s nightmare—land the business but lack of cash reserves prevents serving the customer or client.

Factoring removes roadblocks

For ABS, timing was everything. The customer paid promptly in 30 days. However, payroll is every two weeks. That’s when the company hit on the idea of factoring, which works to turn customer invoices into immediate cash payments. By factoring, ABS wouldn’t have to wait 30 days to get paid. They’d get paid immediately and be able to meet payroll. In fact, by factoring more clients, ABS had a growth strategy.

But which factor? QC Capital Solutions offered the best solution for ABS’s startup year, plus had the resources to meet ABS’s plan for growth.

“QC Capital had the flexibility and stability to get us the cash flow we needed to add clients and get us through the growing pains until our bank can catch up,” said Cory.

Growing the business

With an ace card like factoring, ABS had what it needed to take off. From 2014 to today, many more clients came on board. These businesses were drawn to ABS’s outsource solution for administrative functions and paid in the customary 30 days. Factoring turned the invoices into cash that enabled ABS to add customers and resources, as well as pursue more accounts.

Said Cory, “We wouldn’t have been able to grow at the rate we have, and stay competitive without the help of QC Capital.”

A great partnership

For ABS, partnering with QC Capital was instrumental in growing their business. The same is true for QC Capital. ABS is the perfect company for factoring, a startup poised for success with customers paying on terms, but the company lacks cash equity to cover payroll when a quick turnaround is essential.

Cory sums it up for both American Business Systems and QC Capital Solutions.

“It’s been a great partnership, and we’re looking forward to many more years of success.”