For the longest time, businesses of all types have been issuing invoices with staggered payment schedules. This courtesy gives clients a period of 30, 60, or even 90 days to pay for goods and services received from businesses so as not to place a strain on finances, especially for large orders. However, the business landscape has changed over the decades, and commerce takes place at a much faster rate than ever before. Apart from banking, weekends mean less and less in the business world, and our constant connection via the internet and mobile devices have us closing deals and making sales with the swipe of a finger. So why should your business still have to wait a month or longer to receive payments on aging receivables?
Unpaid Receivables Place a Strain on Businesses
While the standard business procedure of issuing invoices with staggered payment schedules works out great for customers, it can create a major strain for businesses. Waiting a month or longer for payments causes gaps in cash flow. During that time, businesses have to make payroll, cover regular overhead expenses, pay for materials and inventory to fill customer orders, maintain marketing campaigns, and more. This means that at any given time, businesses are spending more money than they are receiving, and it makes it nearly impossible to achieve successful growth.
Businesses need access to working capital to cover all the expenses listed above, and to take advantage of growth opportunities. For these reasons and more, businesses are taking advantage of the benefit of accounts receivable factoring. While factoring is not a new concept, it is the one form of financing that has kept pace with the business world so companies can get money quickly and efficiently. By factoring receivables, businesses can get their unpaid invoices converted to cash which is made available within 24 hours. There are no contracts or hidden fees, and businesses can choose which receivables or parts of receivables get factored. Factoring provides a fast turnaround and the flexibility that today’s business owners demand.
New Century Financial provides the most comprehensive accounts receivable factoring services and solutions. Contact our offices today and stop letting standard procedures slow down your cash flow.