Whether a business is in its start-up year or it is a thriving enterprise, practically all have experienced a pile of unpaid invoices collecting dust. In some cases this can cause major waves in business operations. It could make meeting payroll impossible, or it could hinder the company from being able to purchase more inventory. However, thanks to the many benefits of invoice factoring, businesses are able to collect immediate cash on unpaid invoices and continue running their business uninterrupted. Keep reading to learn more about this option.
Choosing the right provider
Finding the right invoice factoring company to assist your needs is a vital part of the process. Like any other industry out there, you get companies with great reputations and others that need much room for improvement. When your business is facing cash flow issues, borrowing money from traditional banks and other types of lending institutes can often add to the problem. They either charge way too much, or they can’t provide you with the right solutions.
The best invoice factoring company will be prepared to give you a cash advance on your unpaid invoices, while taking no more than five percent for their commission. If any company tries to charge you more than five percent, keep looking elsewhere.
Furthermore, the company that cradles your business in their hands should be prepared to take on 100 percent of the responsibility in getting your invoices paid while taking all the credit risks. You should also have several options on the table. If a company only offers you a single solution, go to Google and see what other companies result from a search.
What to expect in the beginning
A good invoice factoring company should ask for nothing up front. Doing so would be counter-productive and defeat the purpose. After all, you are turning to them because you are in a financial pinch. You should also be able to collect the advanced funds within 24 hours of applying for assistance.
The quality of service and attention you receive will attest to the company’s integrity. Your accounts receivable factoring specialist should fully empathize with you and understand what it is like to go through an ordeal where unpaid contracts are hurting your brand and business reputation. As a result, the process you go through should be effortless and speedy. Finally, make sure you can reach them 24/7. Not many companies have this option, but there are some out there who understand the importance of around-the-clock customer service and how it provides comfort and convenience that helps clients sleep a little better at night.
Keep your paperwork filed
Keeping your contracts and invoices in a secure and well-organized system will help with the process. In terms of what factoring companies look at, you will need a paper trail that shows orders to delivery as well as provisions of goods and services that were stipulated in the orders. Keeping a record that is easy to read and follow and that corresponds with your ledger is of great importance.
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