Traders Taking Advantage of Factoring To Manage Receivables
Whatever the kind of business is, quality cash flow is a must. Without a reliable cash flow, individuals can face situations concerning business plans, negotiating best terms and grabbing new opportunities in the industry. For manufacturers and trader, it is essential to serve buyers and suppliers with complete satisfaction. This is the place where factoring services play a crucial role.
Factoring is the process which is all about selling receivables to the third party on discount. The kind of service is popular in various developed and developing countries to help manage accounts receivables of all types of traders and manufacturers.
As per surveys, many small units running under small scale sectors have been found progressing slow because of financial difficulties. Introduction of accounts receivables service is therefore, proving advantageous for such units.
Easily, units are moving ahead in terms of handling cash flow and concentrate on business development aspects like marketing, product development, developing relationships with suppliers and more.
The service is popular among all kinds of traders for various salient features like:
Concept and types
The concept can be explained as; it is a legal relationship continued between the factors i.e. a financial institution and the client i.e. a business concern. It is meant to sell goods or services to the regular customers on the open accounts basis with the proper handling of accounts by the providers.
Presently, the solution is popular for its six different types including full, recourse, advance, maturity, invoice and undisclosed factoring.
Functions of full factoring
Among all, the full purchasing & collection option is more popular. It is comprised of different ingredients. The first is the financing which is meant to receive cash through the way of prepayment of receivables. Other functions or ingredients are the sales ledger maintenance, credit protection against debts and recovery of bad debts.
Pricing of services
The pricing of accounts receivables vary, depending on the types of traders. The pricing is based on different aspects like track record and credit worthiness of the customer, turnover, track record, average size of invoices etc.
Advice for growth
Offering instant cash is a great way to maintain the performance of business. Along with this, leading providers also offer advice for the growth of business. They offer ongoing advice and counsel, understand business problems of traders and find solutions for them and also, helping them with advices to capitalize on advance opportunities.
Considering the above discussed aspects, it can be said that the service is one of the best ways for modern manufacturers and traders to develop their business profitably and with full confidence.
Factoring is the process which is all about selling receivables to the third party on discount. The kind of service is popular in various developed and developing countries to help manage accounts receivables of all types of traders and manufacturers.
As per surveys, many small units running under small scale sectors have been found progressing slow because of financial difficulties. Introduction of accounts receivables service is therefore, proving advantageous for such units.
Easily, units are moving ahead in terms of handling cash flow and concentrate on business development aspects like marketing, product development, developing relationships with suppliers and more.
The service is popular among all kinds of traders for various salient features like:
Concept and types
The concept can be explained as; it is a legal relationship continued between the factors i.e. a financial institution and the client i.e. a business concern. It is meant to sell goods or services to the regular customers on the open accounts basis with the proper handling of accounts by the providers.
Presently, the solution is popular for its six different types including full, recourse, advance, maturity, invoice and undisclosed factoring.
Functions of full factoring
Among all, the full purchasing & collection option is more popular. It is comprised of different ingredients. The first is the financing which is meant to receive cash through the way of prepayment of receivables. Other functions or ingredients are the sales ledger maintenance, credit protection against debts and recovery of bad debts.
Pricing of services
The pricing of accounts receivables vary, depending on the types of traders. The pricing is based on different aspects like track record and credit worthiness of the customer, turnover, track record, average size of invoices etc.
Advice for growth
Offering instant cash is a great way to maintain the performance of business. Along with this, leading providers also offer advice for the growth of business. They offer ongoing advice and counsel, understand business problems of traders and find solutions for them and also, helping them with advices to capitalize on advance opportunities.
Considering the above discussed aspects, it can be said that the service is one of the best ways for modern manufacturers and traders to develop their business profitably and with full confidence.
