Factoring BenefitsWith factoring your profit increases due to your increased cash flow, simply because you now are making use of your fixed assets more effectively. Factoring works because it gives a business instant cash thus increasing the business's ability to purchase additional supplies and labor which enables for increased productivity with the same capital base.
Factoring also has additional benefits. The factor(Us Not... You) assumes responsibility for the collection of invoices. That reduces your accounting department of credit checks and provides customer follow-up when an invoice is due. It could mean operational cost savings of as much as 2 percent each year. And it allows every employee in an organization to focus on sales and production.
With factoring, you keep complete ownership of your business and you get money you need.
There are not many bigger challenges for small business owners or managers then waiting 30 to 60 days to get paid by their customers. Although larger companies can generally afford it, smaller businesses can not afford the delay. As a matter of fact, waiting to get paid on invoices can make cash flow problems that affect the owners capability to meet payroll or pay the companys bills. This problem can be more annoying if the business has a number of orders that it cannot fulfill because its cash is tied up in unpaid invoices.
Quick Link to Financial Resources:
|Purchase Order Financing||Accounts Receivable Financing||Asset Based Lending Options|
General Articles about Accounts Receivable Financing and Factoring:
» 08/01/2012 Debt Financing or Off Balance Sheet Financing?
» 07/22/2012 Increase Your Business Lines Of Credit By Factoring Accounts Receivables