For many businesses, accounts receivable financing offers distinct advantages.
In recent years, accounts receivable financing, also known as factoring, has grown in popularity, and it's not surprising why: instead of waiting long payment cycles to receive payments from your invoices, many businesses enjoy the advantages (as well as the financial freedom) that come with receiving almost immediate cash payments.
The benefits of accounts receivable financing include:
Working capital
This one is obvious, but it is one of the most attractive aspects of accounts receivable financing. Instead of waiting 30, 60 or 90 days to receive payment on your invoices, factoring offers the possibility of having the cash in your hands in a much shorter period of time.
Debt Free Cash Flow
Accounts receivable financing is not a loan, so it may imply having a cleaner balance sheet, since it will not assume additional liabilities.
Better credit score
In addition to debt-free cash flow, there are also potential benefits to your company's credit score. By having timely financing, you can have your accounts payable under control.
Viable alternative to bank loans
Many businesses (especially start-ups and "conventional" unsecured businesses) cannot afford to apply for a loan. Other companies are not interested in making monthly loan payments. In both cases, accounts receivable financing is a great option.
Ease in the process
Unlike a bank loan, the factoring application process is quite simple. And once approved and established, the ongoing funding process is easy. Your line can easily grow as fast as your business expands.
Reasonable commissions
Factoring commissions are considerably less expensive than typical MCA (merchant affiliate cash draw) or other types of alternative and start-up financing. Commissions vary by industry, down payment rate, billing volume, and other considerations.
Less worry
When you're confident that you can pay your bills and pay your payroll on time (without even affecting your credit), it's much easier to focus on the operational aspects of your business that pave the way for sustained success.
Growth opportunities
Increased cash flow gives you the potential to grow and expand your business as soon as the opportunity presents itself. You don't have to wait for the bank to approve a loan to make a quick purchase, because you already have the cash you need and we have a long history to help you.
Financing available for startups and companies with high credit risks
Since the factoring company focuses on the strength of your creditors, as well as the strength of your company's financial history, factoring is perfect for startups, high-growth companies, or companies that have experienced some financial trouble.
Professional Cash Management Services
When you work with a factoring company like Commercial Funding Inc., you can simply "sit back and forget it all." We'll take care of all the paperwork, processing and collection, so you won't have to lift a finger. We serve as an extension of your company so you can focus on the important aspects of growing your business.
Professional credit without contribution: how to obtain the best credit?
In simple terms, it is the money that your customers owe to the business.
Generally, the IOU transactions go smoothly with the customers, and the amount due for services provided is received in time.
But there are a few tested tips that you must follow for optimizing your Account Receivables Process in the year 2020.
These tips can make the process faster that will help you to grow your business.
Record all receipts, revenue, orders, and service requests in your books as soon as they arrive.
If you distribute the invoicing work to certain staff, they will be able to organize and prioritize the tasks which need completion.
