Sure, a really good accounts receivable clerk may collect more than a bad one, so in a sense they brought cash into the business, but they are really only collecting money you have already generated by selling a product or providing a service to a customer.
Using a Factoring Company to Collect Your Accounts Receivables?
Now, think about this. Accounts receivable or invoice factoring companies are not only a good source of cash for operating and growing your business, they are experts at assessing and collecting on accounts receivable invoices. That is one of the main focuses of their companies and it is how they get paid. They have a vested interest in making sure that all the payments come in on time. So when you utilize a factoring company, you, in a sense, outsource your accounts receivable at no extra cost. You can eliminate your accounts receivable position(s) or you can reassign those employee(s) to higher payoff tasks.
Now only you can figure out exactly what you are spending on accounts receivable collecting and how much you would save if you outsourced this cost center to the expert invoice collectors at a factoring company. However, it is definitely worth looking at.
Some Advice on Outsourcing Your Accounts Receivables to a Factoring Company
Now let me give you a few other pieces of advice about using a factoring company for your accounts receivable:
- You may still want to service some of your best personal clients in house if you have a close relationship with them.
- The factoring company can handle most of your customers.
- It is in the best interest of the factoring company to treat your clients well, particularly if they will be handling your accounts receivable invoices on an ongoing basis.
- Also, it is perfectly alright to review their collection process, or the letters and phone scripts they use when dealing with your customers. Most good factoring companies will be open to this.
Again, I hope this has helped you to see how accounts receivable financing can save your business some money. If you would like to receive more information give us a call at 877-648-3709.