There is no doubt that accounts receivable financing has gained popularity over the last few years. First, the benefits offered by such financing are great since it plays a huge role in improving the company’s financial profile as well as the market credit. With the constant growth in different companies, there is the need for the accounts receivable to meet particular fund requirement for further business growth.
Here are some of the reasons why you should take advantage of accounts receivable:
1. Lots of additional services on offer
Many companies are always willing to manage their accounts receivable financing portfolio, which includes reporting and posting as well as invoice processing. Once such issues are taken care of, you will have ample time for other revenue generating tasks like sales and marketing. Additionally, the factoring company enables you to determine your client’s credit rating before you can start selling to them.
In most cases, they would start by checking on your client’s payment history before they can sign them up. This is important because it reduces the chances of bad debt since you’ll start getting better customers with an excellent track record. What’s more, the likelihood of a financial crisis such as the inability to pay taxes and bankruptcy are also eliminated. All these will come as a bonus given that you wouldn’t have to pay any extra fees for such services.
2. More user-friendly
All businesses, whether large, medium, or small, should consider factoring receivables. This is because it will take a few days which is unlike the conventional bank loan where you have to create debts or make payments. What’s more, you can easily finance as little or as much as you want and this directly relates to your sales growth. This means, the higher your sales growth, the higher your financing lines. You can find more information at FundThrough and learn from their online resources.
3. Focus on business
It’s important to consider invoice factoring Canada since it frees up your resource and this gives you a peace of mind. This way you can concentrate on other more productive activities such as marketing or selling. Also, the time spent in collecting payments from clients can be used in building your business.
4. Quicker cash flow
The good thing about factoring finance is that it provides you with the opportunity of converting your credit sales into instant cash flow for your business. Once you get your receivables or outstanding invoice monetized by the financial provider, you should be able to quickly gain access to working capital for your business.