Accounts Receivable Factoring Allows You to Take Advantage of Your Biggest Asset (Part 2)

Another term for Accounts Receivable Factoring is Invoice Factoring, the terms are essentially interchangeable.

When you evaluate the statistics of the number of days your invoices are waiting to be paid and how many are over due. This is simply data about the likelihood of collections. It has nothing to do with sales and how to increase sales.

Do you consider a large Accounts Receivable as a bad thing? Most people do. To determine if this is a bad thing, or good, it will depend on how the Accounts Receivable is made up. Here is an example.

What I am referring to is, if you have a huge inventory finishing out a season, you will need to sit on the goods for several months while you wait for the season to come back. If you had the opportunity to sell off the goods right away, but wait 90 days to get paid, what would you do?

If it is a new customer and you have never dealt with them before, you will review their credit. You come to the expectation that it will take a few months to collect your invoice. Will you accept the order from the client?

Certainly not if we think in terms of the traditional role of the area of credit and collection and containment of risk.

Of course yes, if we consider the area of credit as a generator of value. Even better, use Invoice Factoring to collect on the payment with 48 hours of delivery of the goods and clear out the warehouse. Yes it will cost a bit in terms of a fee for Invoice Factoring, but now you will not have to pay for warehouse space.

This is a very simple example of how Invoice Factoring can help your company. Invoice Factoring will play a major role in the coming years of Commercial Finance and Commercial Credit as it is quickly becoming the preferred method for Working Capital finance.

Think, is 3 times cheaper to retain and maintain a client to get a new one and if Invoice Factoring will help you keep the business you have now, grow new business and reduce the stress of juggling your Cash Flow, you definitely need to speak with a Commercial Finance Broker.

Wade Henderson - very Professional - 15 yrs in the Business Finance Field - Gets the deal done.
IMMFinancial.com - Accounts Receivable Factoring - Accounts Receivable Financing