The most common type of accounts receivable financing today is factoring. If you are a business owner that suffers from slow paying customers, you might need a bit of help to keep your company running properly until you get paid. Having outstanding invoices does not mean that your company is going to fail or that you are doing anything wrong. Many companies deal with this every day, and there is absolutely nothing wrong with seeking creative financing solutions to keep your company afloat. Having accounts receivables is just something that is part of owning a business, but it does not have to have a negative impact on you day to day.
A factoring company is one which is dedicated to making sure that companies such as yours are able to get the outstanding money from their invoices even prior to the payment. The company will essentially be purchasing your outstanding invoices from you, and will thus give you cash payment at the time you give them the invoice information. After that, your company will no longer have to worry about trying to collect these invoices, as the company buying them will take over the responsibility of all collection activity.
While invoice finance will pay you less than the full outstanding amount owed on the invoices, this is usually quite a reasonable trade off since you get your money immediately if you use this option. The amount that you will be charged for this service varies by company, but in most cases you will get the majority of the money that is owed to you. You also get the opportunity to get rid of all the risk associated with holding onto these old invoices. If you keep the invoices in the hope that you will eventually get all the money owed, you have a risk of waiting for a very long time. In fact, you even have the risk of never getting the money at all. By selling your accounts receivables, you will have cash in hand and pass the headaches of collection onto someone else.
This may be the right thing for you if your company is short of money and you have invoices that haven't paid yet. If you have been promised that you will be paid soon, but some of the people who owe you money keep putting off the payment, working with a company that will buy the invoices can be a good solution. Talk to a local accounts receivable buyer today to find out how they can help you!