Bay View Funding Blog

Eliminating a Cash Flow Crisis – How Invoice Factoring can Help

Invoice factoring is a highly effective tool when it comes to helping with cash flow management. However it is essential that the cash flow cycle for your company, and your industry, is evaluated and understood.

We all know that monitoring cash flow is critical for success. Once cash flow is managed, decisions can be made about whether or not invoice factoring is the most effective answer to help your business achieve optimum cash flow goals.

It is helpful to revisit the fundamentals of invoice factoring periodically. We frequently refer to the invoice factoring procedure in many blogs, but often when concentrating on the benefits of accounts receivable financing as it relates to a specific topic. We have recently discussed the documentation and process involved, but let’s illustrate a little further.

When you decide to factor your company’s accounts receivables, you are essentially selling them to a factor at a discount in exchange for a cash advance. The factor must wait normally 30 but up to 90 days to collect the full value of the invoice from your customers.The discounted invoice amount is the factor’s fee for advancing cash on unpaid invoices. This amount may also be referred to as a rate.

Are you able to respond quickly to a change in demand? How about a major disruption to the distribution or manufacturing process?

On an operational level, how quickly can your company react to problems or opportunities in the short term, such as a late delivery, a customer needing extra items on a large order, or items that were due to be delivered by ground now need to get there overnight. On a larger scale, your company wants to start selling on the web, or a product is changing design or certain components, and therefore disrupting the production process. What would it take to change the direction of your supply chain?

A successful business is able to quickly respond to sudden alterations in demand. The need to be able to adapt to sudden change is vital in today’s rapidly advancing world. This has become harder in an economy that demands efficiency. The recession witnessed a drop in demand, which saw many companies trimming inventory and cutting costs in supply chain operations. However, a company with a weakened supply chain struggles to keep pace with economic recovery.

Are you paying too much for invoice factoring?

How would you know? Read on to make sure you are accessing your working capital for the lowest rates, while also receiving fast turnaround and great customer service.

There is often a collective sigh of relief when your company makes the decision to factor accounts receivables. The forms have been submitted and accepted, and the factoring process seems to be going as planned. Working capital is rolling in ahead of time, allowing you to keep up with payments on your day-day operations. However, the ability to feel in control of bill payment can often override the fact that you may well be paying too much for factoring, receiving slow service, and a mediocre customer experience.

A Strong Team Pulls Together

Find out why raising money for the American Cancer Society means so much to the employees at the invoice factoring company Bay View Funding.

Glen Shu, President and CEO of Bay View Funding, strongly believes in a company work environment that encourages a feeling of community among his employees. A group of employees with no connection is less likely to pull together as a team to help make a difference. He was keen to find the right charitable cause that would also support his staff. Lynn Richard, AVP and Senior Account Executive, suggested the American Cancer Society because she has been involved in fundraising activities for cancer for several years. More importantly, Lynn is a cancer survivor herself. She was also aware of coworkers who had lost loved ones to cancer. Glen needed no convincing, and agreed that this should be a charity the company would support.

Do not risk exposing your company’s confidential data to security threats!

There are many articles written about IT security threats. We often choose to believe it will not happen to our business, until something catastrophic does occur, and then it can be too late! The risk of losing confidential data should be a strong enough incentive, but understandably we often trust the systems that are in place, and we assume our data is protected.

Warning! You are about to read a blog following a negative question! Can invoice factoring be bad for business? Read on.