What to Expect from a Factoring Company

What to Expect from a Factoring Company

Accutrac Capital 01-Feb-2013 0 Comments

Factoring companies can offer ideal alternative financing solutions for business owners who have difficulty finding financing through traditional sources such as bank loans and lines of credit. The processes, experience, resources and knowledge that a reputable factoring company, like Accutrac Capital Solutions, brings to the relationship, however, can offer additional benefits to the businesses they work with. Here are some of the things you can expect from a professional factoring company.

Access to cash without creating debt

Through services like factoring and purchase order financing, business owners can turn their accounts receivable invoices into immediate cash or use a qualifying purchase order to obtain funds to pay their suppliers. Qualifying for financing is based on the creditworthiness of your customers, not your business or personal credit history. That means that businesses that might not qualify for traditional financing can qualify for financing through a factoring company. And, factoring isn't a loan, so no debt shows up on your business's balance sheet.

Cleaning up and managing accounts receivable

Managing accounts receivable is a large part of what factoring companies do. They have tried-and-true processes and tools to get your business's accounts receivable ship-shape. That can translate to reducing the average days outstanding for accounts receivable invoices. Factoring companies also become an impartial third party to professionally follow-up on late payments or short payments.

Business planning and credit planning

Factoring companies are experts in cash flow and extending credit. They have the tools, resources and knowledge to help your business:

  • predict future cash flow so you can plan accordingly
  • create solid credit policies for your customers
  • recommend how much credit to extend to a customer and under what credit terms

Electronic and online factoring services

Accutrac is one of the few factoring companies that accepts electronic copies of required paperwork from qualifying customers. That removes the hassle, time loss and costs of couriering paperwork needed to complete your transaction. Plus, they provide secure online access to reporting and tools that let you check on activity in your account whenever it's convenient for you, 24 hours a day, 7 days a week.

Back office accounts receivable work done for you

Many small to medium-sized businesses struggle with managing accounts receivable. That's especially true when business is in a growth spurt and invoicing and accounts receivable follow-up take a back seat to Ôgetting the job done'. The back-office work usually associated with accounts receivable management is taken care of for you when you factor. That takes a huge load off the shoulders of accounting staff and business owners who might otherwise get bogged down with chasing after receivables.

For more information about factoring, purchase order financing or managing accounts receivable, visit www.accutraccapital.com.

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