- Accounting and Payroll Service
- Best Metrics for Key Performance Indicators
- Best Practices for Invoice Factoring
- Cash Flow
- Extending Credit to Customers
- How to Identify a Business Partner
- Increase Cash Flow
- Money Saving Tips
- Purchase Order Financing
- Setting Priorities
- Small Business Decision-Making
- Small Business Lending
- Small Business Management
- Tech Tools for Small Business
- The Need for Optimism
Invoice Factoring 101
Accounts receivable issues can be difficult for many companies to bear, especially smaller firms and startups. In these trying financial times, chasing invoices can quickly become the full-time job for many business owners. When times are tough, payments can dry up, leaving your company without the vital lifeblood it needs to grow and thrive. Invoice factoring allows ambitious businesses to release cash flow still tied up in unpaid invoices – helping you to grow, even when cash-strapped clients have you waiting for payment.
What is invoice factoring?
Simply put, invoice factoring is a way for any business that sells products or services to other commercial vendors and then waits for payment to leverage their accounts receivables to work for them, not against them. Rather than waiting for slow paying vendors, you can convert account receivables quickly by selling invoices to a factoring company for a nominal discount.
Invoice factoring is quite different from the traditional loan-based programs offered by banks. Most banks base loans on credit history which can be difficult for small companies and startups. With the Plus Funding programs, we focus on the credibility of your clients.
As opposed to a financial institution that can take several months to approve your loan, in most instances, Plus Funding can approve your company in a matter of days. Additionally, a key benefit is that because invoice factoring programs are not loans, there will be no debt on your company’s balance sheet.
The steps involved in invoice factoring with Plus Funding are simple and clear:
- Your customer (XYZ Co) requests goods/services from you.
- You deliver these goods/services to XYZ Co.
- You issue an invoice to XYZ Co.
- You sell this invoice to Plus Funding.
- Upon verification of the invoice (typically 1-2 days with a preexisting facility in place), Plus Funding will advance cash (typically 70-85%)
- XYZ Co pays Plus Funding.
- Upon receipt of the payment, Plus Funding releases the difference (reserve) between the collected amount and the advance, minus the factor’s discount fee.
For more detailed process, please visit Our Process page.
Our services are custom designed to fit each client’s specific needs. Our fee structure is efficient and effective, many times as affordable as “early bird” or pre-pay discounts offered by many companies. Our knowledgeable staff is friendly and courteous, helping you to enhance and maintain your working relationships with clients.
Invoice factoring can be a benefit to virtually and company. Contact Plus Funding today and start leveraging your accounts receivable for growth and stability right away.