Invoice Factoring

What is invoice factoring?
Are you having trouble getting your customers to pay their invoices? Is that having a knock on effect on your cash flow and balance sheet, which is holding back other products and purchases? This is not uncommon, and since the recession has taken hold in the last four years, more and more companies are now hanging onto money for as long as they possibly can, which is making it extremely difficult to get people to pay invoices.
You’ll constantly find that y6ou simply don’t have the time or energy to carry on chasing them, and in the end you’ll give up and let them pay when it suits them. That’s simply not right, but seems to be the way more and more companies are going.
Invoice factoring works a way around that, and you contact a factoring company , who buy your invoices off your for cash up front. You can then get on with spending the money on new projects and paying your own invoices so you can move your business forward.
It is then the job of the factoring company to retrieve the money from your customers on your behalf, and they do have the time, resources and often the right methods of persuasion to get customers to pay their invoices on time.
What does invoice factoring cost me?
Often you will find that you will be paid slightly less by a factoring company for your invoices than they are worth, but once you’ve worked out what your time is worth in making call after call chasing up the money, and you work out how much more money you can make by starting new projects earlier because you have the money up front, your company will end up better off than they would be waiting for the invoices to be paid.
Your company is also transferring the risk that the invoices are never paid, and with more and more companies going under each and every single day, it’s a fantastic way of eliminating the risk from your balance sheet.