Search:

Would you like to contribute to this site? Cashflow Menu Submit an Article Submit a Tip Place your Ad Add URL Cashflow Questions? Contact Us  About Cash Flow   Projecting Cash Flow   Calculating Cash Flow   Tracking Cash Flow   Cashflow Models   Cashflow Software   Cash Flow Management   Cash Flow Strategies   Cash Flow Financing   Cash Flow Notes   Industry Factoring   Types of Factoring   About Factoring   Financing Accounts Receivables   Accounts Receivables   Small Business Funding   Types of Funding   Cash Flow Statements   Financial Statements   Cash Flow Companies   Discounted Cash Flow   Free Cash Flow   Industry Cash Flow   Cash Flow Business   Cash Flow Books and Experts   Budgeting   Personal Finance   American Cash Flow   Rich Dads Cash Flow   Cash Flow Online   Money Saving Tips

Return To Cashflow Article Archive   Search the Article Archives Increase Cash Flow With Invoice Factoring By Robert Michael Invoice factoring is one of the quickest, easiest ways for business owners to increase their cash flow. If your business produces invoices, then invoice factoring is an option for you. The process of invoice factoring works in just a few simple steps. When an invoice is created, you sell it to the 'factor' at a discounted rate - usually about 3 to 5 percent off of the invoice total. Factoring means you do not have to wait for the customer to pay to start collecting money from the invoice. First you, the business owner, notify the factor that the invoice has been created. Usually this can be done electronically. You provide the customers contact information to the factor, and the factor will confirm the invoice with your customer. Typically, invoices are confirmed with a simple letter or phone call. Usually the factor appears to your customer to be a billing processor or department, confirming the invoice on your behalf. This way, the customer does not realize you have sold your invoice to a third party. Some invoice factoring companies are willing to remain completely invisible to your customers. And after you have established a relationship with your factor, and they are more familiar with your business and your customer base, they will likely stop confirming every single invoice. After the invoice has been confirmed, the factor pays your business what is known as the 'advance rate.' This is a percentage of the invoice total, typically around 70 to 85 percent. The factor then collects the total amount of the invoice from your customer. They keep their 3 to 5 percent, and forward the rest of the total to you. Invoices factoring increases your business working capitol and helps improve the credit rating of your business. And, when factoring your invoices, you are in control. You decide which invoices to factor and which ones to collect yourself, based on your relationship with your customer base. Have you just recently started up your business? Are you finding it difficult to build enough working capitol to run your business day to day? Invoice factoring can work as a bridge to get you over the rough waters after start-up until your business is able to run smoothly. And, if your business has poor or no credit history, invoice factoring is an option to consider if loans or liens wont work for you, or if you consider them too risky. A steady, reliable cash flow is necessary for any business to operate smoothly. Worrying about your cash flow also causes business owners more stress than almost any other aspect of their business. Invoice factoring allows you to stop worrying. It is the simple, fast way to increase cash flow now. About the Author: Robert Michael is a writer for MZ Factoring which is an excellent place to find factoring links, resources and articles. For more information go to: http://www.mzfactoring.com' American Cash Flow System

Get your Cashflow questions answered... Subscribe to our Cashflow Newsletter FREE! Your First Name: Your Email Address: Enter above security code

Home  |   Cashflow Blog  |   Ask the Cashflow Expert  |   Cashflow Archive  |   Cashflow RSS Feeds  |   Advertise  |   Sitemap