10 Questions to Ease the Decision Making Process    

When you are looking for an accounts receivable financing company for your customers, consider more than just the deliverable.  Working capital matters, but reliability matters more!

As with any partnerships, there are ups and downs, and good relationships can be hard to find. Obviously, credibility with your customers is one of the most important elements of your business. There may be occasions when you would like to refer your customers to an accounts receivable financing company, or factor, but they all look the same! It is hard to differentiate, so what should you be looking for in a broker partner?

So what is freight bill factoring? and why is reliability so important? 

In simple terms, factoring companies pay you money now for freight bills that your customers may not pay for up to 30 - 60 days. Factoring your accounts receivable helps you maintain a constant flow of cash. In a trucking environment that is by nature hectic, constants are critical! Regular, on time payments from your customers can often be a challenge.

• How quickly do your customers pay?

• Do you spend time chasing payments?

• Have you offered discounts but still spend time collecting?

• How many of your customers are 'solid' payers?

So how can invoice factoring accounts receivables really help manufacturers? Why is it a great solution?  

The obvious answer is that manufacturers require consistent working capital. This is not always possible with late payers, which is where factoring your invoices can eliminate the time period between invoicing and payment.   

So we understand factoring, but let’s examine in more depth why this is such a viable option. There is no doubt that although many manufacturers survived the worst of the recession, times have been tough. Cash flow problems were caused by:  

• Customers making late payments

• Suppliers wanting to be paid more quickly

• Large customers extending terms of payment

Balancing Customer Relationships 

Have you recently experienced the pain of having to acquire payment from outstanding invoices? It’s a balancing act, maintaining a good relationship with your customers, while pressuring them to be timelier with their payments, which may cause them to take their business elsewhere. Meanwhile, your suppliers are also waiting to get paid. 

Are you looking to eliminate some of this administrative headache, and some of the costs?  Factoring can certainly provide the benefit of reducing some of these costs to your company by providing the following: 

Business Growth

Your business is growing rapidly and that is exactly what you want, but are your customers paying on time and are you financially ready for growth?  Managing your cash flow is the key to success.  Expansion is excellent, but it also means there is always something more youneed to pay for, such as:

Five Common Customer Concerns

So your business needs accelerated cash flow and obviously invoice factoring is a great answer but you may have concerns that immediately spring to mind when you consider the idea of factoring.

How invoice factoring works, and how it can benefit you

Invoice factoring, also known as accounts receivable factoring, is a form of working capital financing for businesses selling goods and services to other businesses on credit. By “selling” their invoices to a factoring company, a business has access to instant cash, professional accounts receivable management, and up to date credit information. 

Who Can Use Invoice Factoring?

Any B2B business selling its products and/or services on credit terms (i.e. net 15, 30, 60, etc.). Business can be early stage start ups or tenured entities with annual revenues up to $60 million.