Invoice factoring is commonly misunderstood by business owners, but even more misunderstood by your customers. Customers have seen invoice factoring as a negative for the wrong reasons, when it’s actually a positive for both their own needs and the business’s needs.
What Your Customers Should Know About Invoice Factoring
Your customers should know that invoice factoring is a common business practice. Not only will is it a good sign of financial health, but also shows that you care about your relationship with them. Here are some of the most important facts that your customers should know about invoice factoring.
1. Invoice Factoring is Common
More and more businesses are frequently turning to invoice factoring as their main form of financing. Invoice factoring is a great way to increase cash flow for businesses in a cost effective manner.
Rather than turning to a bank for expensive and time-consuming financing, factoring shows that your business cares about its finances and has done its homework. Invoice factoring is a more cost-effective form of financing. This isn’t something that a business should hide, this is a service that shows they care.
2. Invoice Factoring Doesn’t Change Your Services
Although your customers will be sending their payments to an invoice factoring company, rather than your company, it won’t affect the products or services that they will receive from you. Therefore, the fact that a business is selling its invoices shows that the business is likely to continue to thrive.
Your customers should see this as great news, as they are working with a company that cares about its finances.
3. Invoice Factoring Serves All Customers Better
One of the most important things for your customers to understand is that invoice factoring helps give them the best service. When an invoice factoring company purchases an invoice, they take on the process of collecting the funds from the customer.
Rather than dealing with a busy business owner, your invoice will be managed by a fast, friendly, and professional team of business development representatives that will treat your customers with the utmost respect.
4. Invoice Factoring Shows The Business Has Good Financial Standing
Before your business can adapt and partner with others, it’s crucial that their finances are in good standing. Many, if not all, companies will look into the business they are partnering with to ensure that they are financially stable.
They will see your financial standing as the success in the future. If your financial standing isn’t up to par, they will most likely turn the other way. Selling your invoices is a great sign that your business is not only thriving currently, but will continue to thrive in the future.
Understanding Invoice Factoring
With invoice factoring, a business sells their outstanding invoices to an invoice factoring company that advances up to 96% of the amount of the invoice in just 24 hours or less with low rates. This allows businesses to get immediate access to the cash owed to their business to secure a strong source of working capital. This makes it easier for business to fund their project, take on more clients, stock up on inventory, and more.