Collection of accounts receivable

#3 in this article is probably the most important of the 5 points.

Working with a factoring company will not only convert your receivables to ready cash, but also provide follow-up on past due invoices. Some factoring companies even provide “non-recourse” factoring, which means that once they purchase an invoice, they assume the credit risk of non-payment, so you need not have an in-house collection process at all, thus reducing your costs.


Cash is key for survival

The more successful your business, measured by the rate of increase of your sales, the greater your risk of bankruptcy. That is because increasing sales tie up the cash of your business at a faster rate than you can generate profits. Here is an good article about 10 simple rules to follow to avoid getting into a cash crunch. Accounts receivable or unpaid invoices are one of the main areas which tie up your cash. Factoring is the solution to convert your receivables to cash, accelerating your cash flow, and preventing you become one of the 82% that fail.

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