Have you ever considered Invoice Factoring? This is essentially another term for Accounts Receivable Factoring and is completely interchangeable.
When you analyze your Accounts Receivable Collections, and you see the number of days to collect your Accounts Receivable and how many invoices become overdue, remember this is data about the odds of collecting your Invoices, not how to increase sales.
I will pose another question, Is it bad the backlog in the accounts receivable? Likely your automatic response is "Yes". Let's reconsider the question. In many cases, this response invariably wrong. I think the answer is depends, what does the Accounts Receivable made up of? Value of each particular business; let me give you an example.
I have a lot of goods in warehouse that is out of season which threatens to cost storage postponed until the next season and even missing for 10 months this would entail a loss in value of the business of selling goods of that 5% of Suddenly and unexpectedly, a client interested in such goods, but he wants to buy on credit, what to do?
Of course we proceed to review your credit application but we found a new company, which has no history and even the little that is known is that it usually is delayed until 3 months in payments, plus the owner has little experience in branch, authorize the order?
If you look at the order in typical terms, the answer would be no. Why would you want a customer that you know is going to be over 60 days in Accounts Receivable?
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.
When you analyze your Accounts Receivable Collections, and you see the number of days to collect your Accounts Receivable and how many invoices become overdue, remember this is data about the odds of collecting your Invoices, not how to increase sales.
I will pose another question, Is it bad the backlog in the accounts receivable? Likely your automatic response is "Yes". Let's reconsider the question. In many cases, this response invariably wrong. I think the answer is depends, what does the Accounts Receivable made up of? Value of each particular business; let me give you an example.
I have a lot of goods in warehouse that is out of season which threatens to cost storage postponed until the next season and even missing for 10 months this would entail a loss in value of the business of selling goods of that 5% of Suddenly and unexpectedly, a client interested in such goods, but he wants to buy on credit, what to do?
Of course we proceed to review your credit application but we found a new company, which has no history and even the little that is known is that it usually is delayed until 3 months in payments, plus the owner has little experience in branch, authorize the order?
If you look at the order in typical terms, the answer would be no. Why would you want a customer that you know is going to be over 60 days in Accounts Receivable?
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.
About the Author:
Wade Henderson - very Professional - 15 yrs in the Business Finance Field - reputation for getting the deal done. IMMFinancial.com Working Capital Management Comercial Finance Broker Grab a totally unique version of this article from the Uber Article Directory
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