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Get the Cash You Need and Skip Collection Headaches with Factoring Services

It’s a buzz that can be heard among bookkeepers and accounting professionals across the board: big businesses are adopting a new, 60-day billing cycle. This is extra 30-day delay is causing havoc on all companies especially small businesses who more heavily depend on those incoming funds to maintain cash flow and operate their business.
Factoring for Cash Flow
Invoice factoring, sometimes called account receivables factoring, is one way companies can keep a steady cash flow even when their vendors are failing to pay their bills on time. A factoring company will purchase those invoices at about 95% of the total value and give you the lump sum right up front. Unless you have a particularly generous and wealthy family member, you probably don’t have time to wait 60 days to collect your bill.

“But with a Factoring Company, I Have to Pay for My Own Money?”

Of course, no one wants to pay any more for their money than they have to and in an ideal world, no one would pay to get paid. But directly or indirectly, your accounts receivable and collection efforts are a business cost and a healthy cash flow should be one of your business’s top concerns.

So instead of lamenting this new net 60 rule, an unproductive and likely futile pursuit, you can take the reins of your business’s financials with factoring account receivables and get the cash you need when you need it. Go ahead and read the fine print and research a factoring company that best fits the needs of your industry, but letting poor cash flow ruin an otherwise healthy business would be the real crime.

Factoring Services Provide Collection Help

As an added bonus, and this varies depending on the type of contract you have, the factoring company will handle the collection of those invoices from your vendors. This means if you have vendors who aren’t paying on time or who aren’t paying at all, the account receivables factoring company will take care of those uncomfortable, time-consuming collection calls. If you are a small, unknown business trying to collect from Fortune 500 Company, a factoring company can handle this power struggle for you and spare you the unpleasantness.

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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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