It makes business planning and forecasting more accurate and allows you to take advantage of opportunities that might otherwise be unaffordable.īetter chance of your business surviving - Better cash flow gives your business a better chance of survival. Improved and more predictable cash flow - By using invoice factoring, you can have the bulk of your invoices paid almost immediately rather than having to wait for the money to come in (potentially after extensive chasing on your behalf). Or for any reason for which cash flow might otherwise be a constraint Take advantage of seasonal business opportunities Invoice factoring allows you to release that cash almost immediately, or at least a large part of it. That 30-day chunk of revenue might represent the bulk of your potential cash flow, but you can't actually use it. Most of your debtors will pay within 30 days – some may require chasing, some may not – while others may go over the limit and require more persistent effort on your part. Your company should use invoice factoring when you routinely have a lot of invoices outstanding and your cash flow is suffering because of it.Īs an example, say your organisation sells on 30-day payment terms. When should your company use invoice factoring? The factoring company pays you the remaining invoice amount – minus their fee – once they've been paid in full.
The factoring company chases invoice payment if necessary. Your customers pay the factoring company directly. The factoring company pays you the bulk of the invoiced amount immediately, typically up to 80-90% of the value, after verifying that the invoices are valid. You "sell" the raised invoices to a factoring company. You invoice your customers for those goods or services. You provide goods or services to your customers in the normal way. Invoice factoring means selling control of your accounts receivable, either in part or in full. Invoice factoring is also referred to as accounts receivable factoring or debt factoring. There are benefits and disadvantages to invoice factoring, which we'll cover in this article. A factoring company will pay you most of the invoiced amount immediately, then collect payment directly from your customers. Call a Riviera Finance representative or request information, and we can help you answer these important questions.Invoice factoring is type of invoice finance where you "sell" some or all of your company's outstanding invoices to a third party as a way of improving your cash flow and revenue stability. Before signing up to factor, it’s important to estimate how our invoice factoring services can increase your business, reduce your expenses, and improve your financial situation. How Can Your Company Benefit by Factoring Invoices with Riviera Finance?Įvery company has a unique situation.
Shifting manpower from collection to marketing and production.Investing in income-producing assets–people and equipment.Saying “yes” to customers who demand credit terms.How this works depends on your industry and your market. Most of our invoice factoring clients can do more business if they have better cash flow. Before you factor, make sure you can take advantage of the features of invoice factoring and leverage them into value: Take on Additional Business Now that we have answered what is invoice factoring, discover the benefits of factoring invoices with Riviera Finance really boil down to adding profit to your bottom line. How Invoice Factoring Can Benefit Your Company
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