One of the biggest challenges for many businesses is managing cash flow. This is especially true if your company has slow paying invoices. Waiting for your clients’ payments to come in can make it difficult to pay your bills and invest in expanding your company. One solution to this problem is invoice factoring. A factoring company will purchase your invoices and pay you an advance, usually around 80% of the total due, and then pay the rest once payment is received for the invoices. They will then deal with your clients and make sure payment is received. This frees up your working capital and allows you to run your business as you see fit.
When you begin to look for a factoring company, there are several things you should keep in mind. First you want to understand how much money you receive up front and when you receive the rest of the invoice amount. Second you want to know what the fees are for using the factoring service. Finally, you should also be aware of how delinquent accounts will be handled.
Once you’ve chosen your factoring company in Huntsville, AL, the rest of the process is relatively simple. You will set up a factoring account with the company who will then send out the notices of assignment. Next, you will submit your invoices to the factoring company along with a schedule of accounts. They will verify everything and send you the advance. Once payment on invoices is received, they will send you the rest of the invoice amount. Most companies will establish a schedule for how often invoices are sent to the factor for processing.
If your company has a significant amount of cash tied up in slow invoices, it may be time to consider utilizing contract factoring in Huntsville, AL. Factoring will allow you to have an increased amount of cash available to ensure that your business runs smoothly while someone else handles receiving payment from your clients.