Advantages of Factoring

Factoring Companies may offer different service alternatives to its clients for transfer of receivables. These alternatives include receivables collection services, receivables management services (that include screening and monitoring of receivables) and receivables finance services (payment of a portion of receivables before maturity). These different types of services help the clients achieve the following benefits:

1. Factoring finance services allow the clients to capitalise on their invoices with a minimum of delay, easing working capital financing needs and decreases overall costs and increases efficiency and profitability.
2. Factoring allows the client to sell on different deferred payment schemes in a way helping the client gain additional competition advantage, increase market share and quality.
3. Factoring provides working capital finance decreasing receivables and inventories, which increases client's credibility by improving liquidity ratios.
4. Collection services help the client save time and resources to focus on core operations rather than chasing receivables.
5. Cash flow management becomes structured and realistic.
6. Factoring screening/monitoring services help the clients be informed on the financial condition and credibility of its buyers.
7. Factoring screening/monitoring services allow the clients to avoid risky buyers.