Accounts receivables are the major worry for most of the business houses. They spend lot of energy to ensure they receive the receivables in time so that they will have enough cash flow and avoid any problems. You need to have steady cash flow in to your business so that you can pay of any loan you have taken and settle the vendors whom supplied materials in time. If any of these get delayed your credit score will go down and it will be tough to bring it up again.

For this you can approach accounts receivables financing companies. It is simply handing over the duty of following up with your customers for the payments to them. You will be eligible to get up to 70% of the invoice amount in advance. This may vary from one factoring company to another. Rest of the amount will be credited after deducting their service charge once the customer pays the amount in full.

Who can take advantage of invoice factoring?

If your customers are all domestic based and within the country and they don’t have any negative credit score then account factoring will be helpful to you. On the other hand, if most of your clients are international or if they have bad credit score, then this option won’t suit you. If you want to check whether you are eligible for the invoice factoring you can login to their website and fill the details in the enquiry form, they will check the eligibility and will send you the details through mail. In the website you can also find out how the people got benefited due to invoice factoring and how it helped them.  They also help you by doing the credit screening of your new customer thus save you from risky customers. This will ensure you don’t end up in loss. They provide support to numerous industries that you can see in their website. Also there is no limit in the payment based on your credit record it is based on your client’s credit record.  It is not necessary to factor all your invoices. It is up to businesses to decide which are all the invoiced they need to factor. Again it is based on type of agreement you are choosing with the factoring company.  If the customer fails to pay the invoice within the stipulated days, you need to re purchase the invoice from the company.

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