Information On The Accounts Receivable Factoring Process
Research released in 2009 U.S. Public Interest Group (USPIRG) showed that 17% of small businesses currently don't offer health coverage because of the red tape and high costs. Successful health reform could generate some serious benefits for small businesses in the US. In the same study, it was found out that 78% of these businesses wished to have those health benefits offered. With accounts receivable factoring, however, small businesses are aided in their aim of addressing health care costs since their invoices can be translated into immediate cash. Here's how accounts receivable financing work.
Normally, small businesses don't get paid until 30, 60, 90 days; but if they can convert these invoices into immediate cash through invoice factoring, then these can cover for health care costs.
Results of the same study mentioned above also purport that businesses that sacrifice in order to provide the needed health benefit think that this type of perk is a major contributor to increased employee productivity.
Single invoice factoring, also known as accounts receivable factoring, has become prevalent, as factors do not expect to buy 100% of a company's receivables. Accounts receivable financing helps businesses that do not get paid for 30 to 60 or 90 days by advancing up to 90 percent against invoices. Of course, it's a must for the factoring company to assess the creditworthiness of the customers of the client. When no issues are involved, then funding can be granted in as little time as twenty-four hours - with a commission fee.
In relation to the recent economic downturn, invoice factoring has become an extremely effective cash management strategy at present. In this type of situation, it is typically small businesses that take the blow - barely making payroll, buying new supplies and paying employee benefits. Factoring allows businesses to generate funds based on the money they know will be coming in.
It's essential not to perceive of factoring as a kind of loan. Instead, it is the purchase of financial assets, or accounts receivables. Bank loans involve two parties, while factoring has three. Banks base their decisions on a company's creditworthiness, whereas factoring is highly dependent on the value of the company's receivables.
Several factors' professional rates are competitive since each client's circumstances vary, which may have an impact on the fees.
Accounts receivable factoring has been around for more than 4,000 years. To know more about this financial concept, kindly call the Interface Financial Group (IFG) at 877.210.9748.
by: Iris Caesar
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