Invoice Factoring, or Accounts
Receivable Factoring, is using your invoices as a way to receive instant capital without losing any control or interest in your organization.
Nearly instant approval and no wait time make our Factoring solutions a highly effective tool in your competitive arsenal.
We make it possible for your company to receive instant funding for whatever need or project you are working on. From making payroll, to getting cash immediately, to covering expenses or growth, we can help.
If you sell goods and services on 30 to 60 to 90 day terms to commercial customers factoring invoices can help avoid late and non-paying accounts.
As a business owner, your greatest asset is the paper invoice you hold in your hand right after you deliver your goods or service to your customer. On your invoice you include the amount and cost of your delivery, VAT registration, etc... But ironically, the number one thing businesses owners do not include on their invoice is the credit terms and due date of the invoice. Without a due date customers feel they can pay you when they want. Your invoice should state clearly the terms on which you trade and the date on which the invoice is due.
However, this does not always ensure timely payment or guarantee payment at all. This is why factoring your invoices will dramatically decrease the volume of your late and non-payment accounts. A factoring company has set account management procedures in place to ensure that your risk of late and non-payment accounts is diminished. A factoring company will fill in all the wholes and gaps small to mid-sized companies have in their accounts receivables due to size, lack of experience or because they are just to busy to follow it that closely.
Your factoring company will follow-up on the invoice to ensure that your customer is completely satisfied with the goods or services you provided as well as to ensure that the account intends to pay on time. Consistent contact with your customer until payment is received hugely increases the odds that they will pay. Of course there are other ways to effectively control the payment of invoices without multiple phone calling. By keeping records of your customer’s payment history you can work with your factoring company to pinpoint the accounts that need reminders and those who don’t.
And by keeping records of payment history and monitoring variations it becomes transparent when an account is experiencing financial problems. When an account that normally paid on time takes longer to pay, delays and makes excuses for non-payment it is time to pay attention. Factoring companies will help you as they have experienced credit controllers who identify changes for you to be aware of. Being aware of a potential bad debt gives you the chance to greatly minimize the damage.
This article describes how businesses can use a factoring company to outsource accounts receivable management and focus on what really matters, growth. With professional credit control services in place to control payment performance your financial position will greatly benefit.
Factoring is very beneficial to small and mid-sized businesses ensuring that all is done to eliminate late and non-paying accounts. Additional benefits include increased cash flow, credit monitoring of new accounts, 24 hour funding (once approved) and unlimited and flexible funding.
