Choosing Accounts Receivable Factoring Companies
The wait to get paid is one of the biggest strains for a lot of B2B businesses. This is especially true for companies who experience seasonal dips, fluctuating cash flows, or prolonged payment rotations.
It might be that a client who pays notoriously slowly is also a reliable customer, who makes a great deal of purchases. So, it is not always a case of clients abusing or disregarding payment deadlines. In fact, the vast majority of B2B clients honour their purchases.
The problem is that processing payments can be tedious and customers often need 20-30 days (often longer) to complete a transaction. If you are on the receiving end of this transaction (the vendor or supplier), the wait can be frustrating.
The Role of Accounts Receivable Factoring Companies
Fortunately, this is where accounts receivable factoring companies can be called on for help. They act as the middleman, in between the vendor and the customer. Acting as a temporary ‘holding point’ for the cash, a factoring company pays off the invoice and then waits to recover the money from the business that originally bought the goods.
If both vendor and customer hold to the agreement, this process moves quickly and is beneficial for all parties. The vendor gets their money much faster. The customer getsa fair amount of time to organize and process the payment. And, finally, the factoring agent makes a profit by taking a small percentage off the invoice price.
To be specific, the factoring firm benefits from the arrangement when the customer eventually pays off the invoice (in full), because they pay it directly to this ‘middle man.’ This is a very old way of handling transactions, but it has remained popular, because it is fast and efficient.
Selecting Accounts Receivable Factoring Companies
If you are considering accounts receivable factoring as an option for your business, you need to be able to spot the reliable companies. While all factoring agents have their own rules and terms, there are a few things that you can look out for.
The first thing to be sure about is the rates and fees. You need to be working with a company that is honest, upfront, and transparent about all charges. Generally speaking, the accounts receivable factoringcompanies that make it easy to calculate fees are the ones that are the most trust-worthy.
Do not be afraid to ask questions. If you have queries about advertised rates, voice them. It is the job of the factoring agent to tell you everything that you need to know. And, once you have agreed on the terms of your arrangement, they cannot be changed without yourprior knowledge or approval.
Working with Capital Funding Solutions
If you want to skip the lengthy search process and avoid the risk of working with low quality companies, you need Capital Funding Solutions. We are here to make your business run more smoothly – just ask the thousands of clients that we serve in Florida, Texas, New York, Georgia, Michigan, Virginia, and more.
Accounts Receivable Factoring Companies in Florida, Texas, New York, Georgia, Michigan, Virginia…