My hubby is running a plastic molding business and 90% of his customers have 60 – 90 days credit terms. No doubt, cash flow is a challenging factor in maintaining the business as a sale should not be considered done unless you have received the money. However, during the time the 60 – 90 days time frame, the same customer may still be making ordering, so can you imagine how much money haven’t been collected?

Thus, I’m glad to know about accounts receivable factoring. By factoring our accounts receivable invoices, which means we sell off our credit worthy accounts, then we will be able to receive cash immediately and that will improve our cash flow in the long term. Besides that, here are some of the benefits listed:

* Immediate access to your cash
* Increased sales opportunity with credit worthy customers
* Credit decision consulting
* Collection help by courteous professionals, if desired

It’s something we should be thinking about, if our business flow is not as good as it is.