Factoring invoices makes a lot of sense for many business owners. A factoring company can advance against invoices when billed, allowing the owner to use that cash right away without waiting 30, 60, or even 90 days. However, some owners may wonder about their customers’ reactions to hearing that their invoices are being factored.
Your customers understand the need for consistent cash flow in a company – and many of your customers understand how factoring works. If you or they have any questions, here are a couple points to remember about what takes place once you submit an invoice to your factoring company.
- Most of the time, a factoring company’s interaction will be with the customer’s accounts payable department and not with sales representatives, project managers or people that you will be dealing with on a day-to-day basis.
- Factoring removes any additional stress that you could be putting on your relationship with your customer from following up about payments and outstanding invoices.
- When you invest in a factoring service, you will be able to strengthen your already existing good relationship with your customer and leave the administration involved with collecting on accounts receivable in the trusted hands of factoring professionals.
Your customers who pay their invoices will have no problem dealing with a factoring company in order to process payments. Although the payment process can often take 30, 60 or 90 days to be completed, you can rest assured that you will have money in the bank while you wait for your customer’s payment cycle to be completed.
Factoring companies are not debt collectors and their communication with your customers is always professional. A factoring company will deal with each of your customers as if they are an extension of their own business.
Factoring is a win-win arrangement for all involved. It takes the pressure off your business while simultaneously enabling your customers to complete payment lifecycles in a manner that also works for their business. Let Interstate Capital bridge this gap for you so that you can take your business to new heights.