Getting Organized with Accounts Receivable Financing

Organization is vital for the success of your business. Getting organized helps to improve your productivity, allows for more effective planning, and helps you to provide quality service to your customers. If you’re looking for ways to improve your business organization, here’s how accounts receivable financing can help.

Get Your Active Customers in Order

Before you can even apply for accounts receivable financing, you need to have your invoices in order. Companies will want to see a list of your active customers, their terms, their invoices, due dates, and if any invoices are past due.

A financing (or factoring) company isn’t going to organize your information for you. Your files need to be organized and up to date before you apply. Make sure the files have all correspondence with each customer as well as copies of sent and paid invoices.

Better Vet Your Customers

A factoring company will only provide advances for invoices that are likely to be paid. To determine what invoices to take on, the company checks the creditworthiness of each of your customers. Invoices from any customers deemed too risky aren’t likely to be accepted.

Vetting your customers before issuing them credit can help you get the most out of your factoring. Not to mention, it’s also better for your business in general. An organized method of vetting customers is vital. Your process should include:

  • Clear terms in writing.
  • A clear late payment policy.
  • The conditions that customers must meet to receive credit.
  • A credit application must be completed by the customer.
  • References to your customers.
  • Business and personal credit reports from your customers.

An organized vetting process helps to ensure that you’re taking on creditworthy customers, rather than just extending credit to all customers who apply. More of your invoices are likely to be financed by a factoring company and you get quality customers.

Less Paperwork for You

A factoring company doesn’t just advance money, it takes on the invoices it finances. When an invoice is approved, you receive up to 90% of the total. When the customer pays, the money goes to the factoring company and you receive the remainder of the total, minus the company’s required fees.

This takes a lot of paperwork off of your hands. You continue running your business as usual but don’t have to worry about dealing with invoices. With less paperwork, you can get more organized and focus on growing your business.

Using accounts receivable financing, you can help to better organize your business. When you’re better organized, you are better set up to succeed.


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