Did you know that Factoring is one of the oldest forms of financing there is. It enables companies to maximize their cash flow by receiving funds early for their receivables to be used for expansion, payroll, bill paying, or whatever the capital is needed for.
The Factoring process is very simple. You sell your accounts receivables for an immediate injection of cash, so factoring is not a loan. You generally get an 80% advance from your invoice immediately (higher advances are available for qualifying industries).
The remaining 20% (reserve) is paid to your company (minus your fees) when the invoices are paid. It's that simple.
In essence, you are out sourcing your credit and collection department. In doing so, you not only get your money more quickly but you will realize many other benefits as well:
1) Credit Investigation: Provides a safety net minimizing risk of doing business with slow-pay or no-pay customers. Through risk management your losses are minimized
2) Invoice Ledgering & Accounting: The Factoring company provides your company with full accounting of all activities done on your behalf with a simple ledgers, some Factoring companies have online access that allows this information to be downloaded from your on secured web site directly into your company booking software, thus reducing accounting cost.
3) Immediate Funding: Usually 80% of the invoice is funded within 24 hours.
4) Follow-up & Collections: The Factoring company follows up on the invoices to affect timely payments, which reduces your personnel and factoring cost. (time is money)
5) Aging & Other Reporting: Some Factoring companies have a State of the art reporting service available on a customized web site that you can access 24/7 .
Want a free Factoring quote Click this Link
Have questions? Call 888-603-0055!
Thanks for reading and have a great weekend!
No comments:
Post a Comment