Account Receivable Factoring News

Factoring Helps Firms Speed Up Cash Flow!

Are your accounts receivable papering the walls? Is your bottom line bottoming out? Are your profit margins marginal? Is your cash flow closer to a trickle?

Consider factoring - a little known practice in the business world that may mean the difference between survival and extinction for a struggling business.

Factoring is the practice of purchasing accounts receivable. A factor is an individual or company who pays a business all or part of an invoice's face value within 48 hours of product delivery, bypassing the 30 to 60 day wait typical of many accounts receivable. The factor takes a portion of the invoice amount as payment, typically five percent to seven percent.

Factoring is ideal for manufacturers, wholesalers, staffing agencies, and service businesses, experts say.

Factoring can help businesses just starting out, or established firms whose cash flow has slowed. And, because factoring frees capital frozen in accounts receivable, it helps clear the way for growth-oriented companies.

Factoring is probably one of the most productive vehicles a company can use. Banks have virtually stopped providing accounts receivable financing.