With constant pressure to show revenue growth and profitability, businesses can’t afford to ignore their trade receivables. It has been shown that when businesses relax their payment and credit requirements they are likely to experience a significant reduction in cash flow and a decline in the profitability of their business.
With a Factoring company’s Account Receivable Financing Services, managing your accounts receivables so that you receive final payment is paramount.
The Benefits of Factoring Invoices
- Factoring is a great alternative to loans!
- Factoring accounts is a quick, easy and affordable way to improve your cash flow.
- Turn invoices into instant cash. Through factoring, your business can instantly benefit from the sale without having to wait for your client to pay in 30, 45, 60, or even 90 days.
- Increase cash flow and working capital without lowering your equity. Since factoring is not a loan, it does not add liability on your balance sheet. This is especially a benefit if you’re trying to obtain other financing where you need your credit checked.
- Make business purchases to increase profitability, like marketing, office supplies and payroll. Use your increased cash flow through factoring company factored invoices to enhance your business.
- Unlike bank loans, Invoice factoring allows you to enjoy the benefits of a cash advance without racking up more debt.
- Protect and improve your credit rating. Your increased cash flow from business factoring will allow you to pay vendors on time, and establishing a great credit rating.
- Take advantage of suppliers’ early payment discounts. Factoring invoices frees up cash enabling you to save up to 4.5% on bills where vendors offer early payment discounts.
- Quick and easy approval process. Approval is determined within days of receiving your completed factoring program application.
- Factors help you with collections so that your staff can focus on building your business and sales. Factoring programs include accounts receivable management on factored invoices, saving your company the overhead of managing in-house.
As a major part of a Factoring company's weekly processes, the team constantly monitors invoices within the past thirty days. They place customer service calls and send past due reminders via email to the accounts payable managers. If your customer is missing an invoice or any supporting documentation, the Factor will immediately forward that information to them electronically. This process guarantees a quick return of payment on your invoices without creating the cost of hiring an account manager.
Other benefits of this process are that factoring can help you manage your credit risk. With a factoring company monitoring the information available through credit reporting agencies we are able to determine credit risk of doing business with both new and existing customers. Determining credit risk before you engage in business with a new customer is critical. Future credit losses can often be avoided by performing a brief investigation of a potential customer’s credit history.
Factoring your Accounts Receivable not only facilitates cash flow but also mitigates unnecessary credit risk, the implementation of mechanisms that reduce the frequency of past due accounts and increase the frequency of invoice payments.
With loan officers in Alaska, Arizona, Colorado, California, Florida, New Jersey, New Mexico, North Dakota, and Pennsylvania, Creative Business Finance is gradually becoming a nationwide leader in Invoice factoring solutions for small to medium size businesses. We can factor invoices in virtually every industry including oil and gas, construction, medical, staffing, transportation and more. If you would like more information please contact us at (720) 432-9118.