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Pay Your Bills on Time – But Not Early – With Invoice Factoring

It is an old, bill-paying habit many people have acquired over the years to help them make sure they pay their bills on time. By paying their bills as soon as they arrive in the mail or email inbox, they are ensuring the bill gets paid in a timely fashion without incurring the additional costs of those price late fees. By delaying, the payer runs the risk of forgetting to pay the bill.

pay bills on time with invoice factoringWhile this pay-your-bills-as-soon-as-you-get-them strategy might be a good tip for 20-year-olds learning how to pay their own credit card bill, it can be a poor tactic for business owners and accounts managers. Of course, paying your bills on time is always a good policy, let’s be clear about that. But by paying your bills weeks early you are unnecessarily reducing the amount of cash you have in your accounts, which could negatively impact your cash flow.

Better Manage Your Bill Payments with Invoice Factoring

If you pay your bills within 15 days instead of closer to 30 days when they are due, but your clients pay you on the 30-day payment deadline, you end up with a payment gap. Month after month, this could hurt your cash flow. If a customer pays late, then you could really be in trouble.

Use Factoring Services to Improve Your Bill-Pay Cycle

To help bolster your cash flow and stay on top of your operational cycle, you can get regular cash payments with factoring accounts receivables or invoice factoring. By selling your current invoices to an invoice factoring company, you can know with confidence how much money you will have in your accounts each month so you aren’t waiting on your customers. If they pay late, you will still have the money in your account; the invoice factoring company will handle the late payment for you.

Factoring receivables is a common practice for many industries including: janitorial services, construction, transportation, manufacturing factoring and more. By recognizing the significance of paying their bills precisely when they are due, either the same day or a day or two before, such companies can make the most of the money they have. Accounts receivable factoring brings predictability and confidence to your business accounts in a way that waiting on customer payments just can’t.

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About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

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