Invoice Factoring - Cash for Invoices in less than 24 hours

Invoice Factoring Cash for Invoices in less than 24 hours Invoice factoring is a financial transaction and a type of debtor finance wherein a business sells invoices or its accounts receivables to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash needs. In the 20th century, invoice factoring in the United States was the most predominant form of financing when the available cash balance held by a business is insufficient to meet current obligations and accommodate its other cash needs Three parties involved in invoice factoring The principal parts to a factoring transaction The "fee" paid to the factor The interest expense paid to the factor for the advance of money prior to receipt of payment from the debtors The factor who purchases the receivables Factor's holdback receivable or the amount used to cover merchandise returns The one who sells the receivables Bad Debt Expense %24 associated with a portion of the receivables that the seller expects to remain unpaid and uncollectible Any additional "Loss" or "Gain" The debtor who has the financial liability that requires him to make payment to the owner of the invoice that the seller can attribute to the sale of receivables Medical Services factoring Traditional factoring Government Receivables factoring Spot factoring Factoring Services Available Construction factoring Export factoring Freight Bill factoring Recourse Non-recourse factoring factoring How traditional invoice factoring works An account debtor submits an order to a factoring client The client submits the order to the factor for credit approval whether electronically, by phone, mail or messenger The factor reviews the order, and if appropriate grants credit approval often electronically thereby accepting the credit risk. Once the order The client or the The client prepares its own invoice and legends it as having been assigned to, owned by and payable only to the factor factor mails the original invoice with its legends to the is approved by the factor, the client ships the ordered goods to the account debtor account debtor as fraud prevention 巴 ! mechanism The client delivers often electronically a schedule of all The factor posts the invoices purchased on its books and maintains a ledger of purchased accounts sold and assigned to the factor accounts and The factor provides detailed bookkeeping and ledger reporting to its client often electronically collections to those accounts while the client makes entries on 自 自 his own books and records to reflect accounts sold and advances received from the factor If there are no disputes, the purchase account is deemed collected by The factor collects the account, applies the the factor and the cash on its records and client's factoring updates the ledger of purchased accounts account is then credited Advantages of factoring 1. Factoring provides a large and quick boost to cash flow with cash infusion within 24 to 48 hours of invoice submission. There are many factoring companies so that prices are competitive Factoring is a cost effective way of outsourcing the sales ledger while freeing your time to manage business It assists in smoother cash flow and financial planning 2. 3. 4. 5. Customers respect factors and pay more quickly 6. Factors usually provide useful information about the credit standing of customers and help you negotiate better terms with your suppliers 7. Factors can prove to be strategic and excellent financial resources when planning business growth 8. Factors protect you from bad debts especially if you choose non-recourse financing Cash is released as soon as orders are invoiced and is available for 9. capital investment and funding for the next orders 10. Factors credit check customers and helps your business trade with better quality customers for improved debtor spread Need Factoring? Call 1-888-382-3766 RESOURCE: http://en.wikipedia.org/wiki/Factoring_(finance) NeeBo Capital http://www.neebocapital.com/factoring-services.php http://www.factoring.org/documents/Factoringarticle.pdf http://www.neebocapital.com/factoring-Invoices_loans.php www.neebocapital.com http://www.business-scene.com/resources/factoring-and-invoice-discounting-basics ASSIGNED