Many companies around the world are suffering financial struggles due to negligent clients who just won’t pay off their invoices in a timely fashion. As this dilemma has continued to progress, there have been developments of ways to deal with the problem. First way of solving this issue is through factoring exchange. This is the process of auctioning off the outstanding invoices your company has. It’s a very simple process and can all be done online. Some have even sold off their invoices within days. There is a network that is used where companies can showcase their invoices to buyers. Both the buyer and seller have to open an account with the online auction site.
As the seller, you will be able to set the standards of your auction, so if you want you can set a minimum price for your auction and a maximum fee you’re willing to pay. Auction timelines vary -- you can have it at 24 hours or even a week. Being that it is an auction, the seller is almost guaranteed to get a good deal because it is highly competitive. The buyers can confidently choose the items they want to bid on because all of the information they need to know about that particular auction is accessible.
When it comes to factoring receivables, this is a whole other ball bark. This option is for you if you’re looking to get rid of the outstanding invoices quickly. A factoring company is sought to buy the outstanding invoices from you, so instead of waiting for the clients to pay in 30 or more days, you receive the payment for the invoice right away. Factoring receivable companies will also handle the invoices of the businesses of your choice. So once everything is signed by the client, saying they are okay with the service or product received from you, the factor will pay you and the client will pay the factor.
Then the other companies (whose invoices you haven’t decided to factor) will still have to make payments to the factor and once cleared, the payment is released to you immediately. So if you’re just looking to have the invoices taken care of right away, this may be your best bet. The factoring exchange is more for those who are looking to make the most off the outstanding invoices.
Robin Trehan is associated with Credit Capital Funding. More information www.LatestBusinessReport.com