Mr. Andrew Cravenho - INVOICE FACTORING AND HOW IT WORKS

Invoice factoring is sometimes referred to as factoring or debt factoring. It is a financial product that enables the business to sell unpaid invoices (accounts receivable to a third-party factoring company (a factor). The factoring company buys the invoices for a percentage of their total value and then takes responsibility for collecting the invoice payments.

Invoice factoring is sometimes referred to as factoring or debt factoring. It is a financial product that enables the business to sell unpaid invoices (accounts receivable to a third-party factoring company (a factor). The factoring company buys the invoices for a percentage of their total value and then takes responsibility for collecting the invoice payments. . Invoice Factoring is an increasingly popular form of alternative business funding. This type of alternative finance has grown in popularity since it has become more challenging for businesses with imperfect credit to use traditional finance products from high street banks.

At CBAC, they pay in two installments, the first covering the bulk of the receivable which fulfills your company need for instant cash-flow and the remainder is paid to you after your client or customer settles their invoice minus a small factoring fee. The necessary steps are; creating a free account with CBAC and then connecting the platform with your accounting software to upload all your financial data. The data is accessed, and then you will receive 30 immediate quotes from the company on your open account receivable. Every quote will show the exact amount of upfront you will receive and the total overall cost. Once satisfied with a quote, you apply together with some final details about your company, upload financial documents, and as simple as that, you will cash in a few business days. Only after the customer’s eligibility is established, CBAC will purchase the unpaid invoices for a percentage of their value and then take over the debt collection process. The remaining amount owed to your business for the invoices will then be repaid once the factoring company has collected the total amount of the invoices from your customers.

One of the problems for many businesses is that payment terms for invoices can be between 30 to 120 days, and this can lead to cash flow issues. The gap in cash flow in this period has often been filled by either bank overdrafts or business loans. This is where CBAC comes in as alternative finance such as this type of account receivables financially can add value. However, where businesses may have less than perfect credit, these options may not be available. Invoice factoring, therefore, can offer a useful solution for similar situations. Necessarily to attain much-needed working capital value, invoices take long periods to get paid. Invoice factoring at CBAC lowers your time spent on administration and chasing late payments since the factor assumes responsibility for collecting the debt and take over the management of your credit control. Besides, it is a quick source of cash flow by financing accounts receivable and releasing working capital tied up in unpaid invoices. Factoring amounts can quickly expand and contract with your sales ledger; factoring is less expensive than turning to equity investors. As experienced debt collectors, CBAC professional and ‘gentle reminders’ can improve your customers’ and clients’ payment times on a long-term basis. Finally, Invoice financing can provide better cash-flow control where there may be different credit terms across your clients and customers.