Using Single Invoice Factoring for the Expansion of Your Small Business
Maintaing and controlling a consistent cash flow is a challenge for most small business owners today. Factoring is one of the least known alternatives available to increase cash flow. Operational costs including hardware, payroll, materials, and taxes can be covered with this one choice alone. It is also a way to quickly fund growth for a small business.
Similar to the credit card business, the factoring process differs in that transactions are exactly business to business. Rather than waiting to get paid by its customer, a business can sell its accounts receivable to a factoring company. As a result, the business boosts its immediate cash flow. The factor then gets the full amount receivable from the customer.
Similar to the credit card business, the factoring process differs in that transactions are exactly business to business. Rather than waiting to get paid by its customer, a business can sell its accounts receivable to a factoring company. As a result, the business boosts its immediate cash flow. The factor then gets the full amount receivable from the customer.
Thus the impact of accounts receivable factoring on profits can be seen readily by comparing the bottom line before factoring with the bottom line after factoring, which enables firms to provide service to a second customer.