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How Does Accounts Receivable Factoring Work?
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Once your invoice has been submitted to the factor from your customers location you need to check and make sure it was actually received and there are no problems with it. After the factor receives the invoice it should only take about twenty-four hours to be approved. Most factors have a cut off time each day to receive an invoice if you want to receive your money the next day.
After the factoring company has approved the invoice you will receive a wire transfer to your bank. From there the money is yours to do as you will. Many factoring businesses would like you to believe that using accounts receivable factoring is a great way to get the money you need to grow your business. The truth is that it is not suitable for many types of businesses. Your billing methods need to be very straight forward to help make factoring work. And it helps if you issue fewer invoices but for large amounts of money. Otherwise the leg work involved can take you away from what truly matters. And that is focusing on your business.
Return to Page 1
Cash Miller is the Editor of SmallBusinessDelivered.com and hosts his own blog at www.SmallBusinessDelivered.com/cash-millers-blog.
Page 2
Once your invoice has been submitted to the factor from your customers location you need to check and make sure it was actually received and there are no problems with it. After the factor receives the invoice it should only take about twenty-four hours to be approved. Most factors have a cut off time each day to receive an invoice if you want to receive your money the next day.
After the factoring company has approved the invoice you will receive a wire transfer to your bank. From there the money is yours to do as you will. Many factoring businesses would like you to believe that using accounts receivable factoring is a great way to get the money you need to grow your business. The truth is that it is not suitable for many types of businesses. Your billing methods need to be very straight forward to help make factoring work. And it helps if you issue fewer invoices but for large amounts of money. Otherwise the leg work involved can take you away from what truly matters. And that is focusing on your business.
Return to Page 1
Cash Miller is the Editor of SmallBusinessDelivered.com and hosts his own blog at www.SmallBusinessDelivered.com/cash-millers-blog.
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