What Is Invoice Factoring?

What Is Invoice Factoring?

Accutrac Capital 30-Apr-2010 0 Comments

What is Invoice Factoring: a clear explanation 

In strict financial terms, invoice factoring is the process which involves selling your account receivables at a discount to a factoring company. The factoring companies advances a percentage invoice value in cash to you immediate upon submission to them.  Once the invoice has been paid by your customer to the factoring company a small fee is charged.

Here's How Factoring Works

  1. You pick up freight from the shipper
  2. You deliver the freight to your customer then send your invoice and bill of lading to your factoring company
  3. The factoring company will send you funds immediately to purchase your invoice
  4. Your customer remits payment to your factoring company
  5. When your customer pays the factoring company they charge and small fee

Other Benefits of Invoice Factoring

Factoring offers various benefits over the traditional loan process.  The size of your factoring line will increase and keep pace with your rate of growth.  It is easier to get approved for a factoring line than getting a bank loan and will provide you cash faster than a bank. It also offers an opportunity to companies to outsource their credit collections and credit investigation.

Factoring services offer steady cash flow for trucking companies which are facing immense challenges in today’s economy. Companies are dealing wildly fluctuating exchange rates,unpredictable fuel prices and driver shortages. Invoice factoring help trucking companies rely on steady cash flow bringing stability in an industry full of unpredictability.

Factoring services can be tailor made to suit your exact requirements while providing you with an easy source of capital.  Factoring Companies also manage your account receivables on your behalf. The factoring company can act as your own personal credit department helping you to determine the credit history of all your customers.

Factoring is simply the best way to ensure that you don't have to worry about cash flow for your business. Accutrac Capital Solutions offers factoring services for all industries in Canada.

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