If you’re in the advertising business, you really have to teach yourself how to adapt to the sometimes glacial pace of the industry. Things can be really slow.
How Slow Can It Get?
Nowadays, most advertising clients can take up to 90 days to pay for services, which is in stark contrast to the time when it just took them 30 days. This, of course, can really stretch your available cash flow, to the point that you may even think about cutting costs and salaries if you manage your own advertising company.
Then you factor in the time you need to obtain a contract and to finally succeed in providing your services. All in all, it can take months from the time you start a project before you get your money which you need to cover operational expenses and salary.
You may want to get a loan from the bank, but that’s another institution which doesn’t really believe in speedy procedures when it comes to providing loans to businesses. The loan application process is notoriously interminable, and what’s worse is that it’s very likely you may not even get your loan application approved.
Factoring for Advertising Companies
There’s a difference between providing generic factoring services and factoring advertising company accounts receivable. Generic factoring companies offer the same basic services of providing quick cash for invoices, but often they require that your advertising clients should be able to pay quickly. Companies factoring advertising company invoices, on the other hand, are quite aware of the trend in the advertising industry that involves very late payments.
In other words, a standard factoring company will be dismayed at a customer’s tardiness at paying their bills. A factoring company with experience in the advertising industry will regard such late payments as “business as usual.”
The Speed of Factoring
Companies that specialize in factoring advertising company accounts receivable may be used to how slow the payments can be from your clients, but these factors can act very quickly. That’s the advantage of working with factors. They really don’t dawdle all that much.
- You can call them up and you can immediate talk to a specialist who can answer all your questions. There’s no delay about finding the answers for you, because you’re already talking to an expert.
- You can then fill out the information required for online applications. This can be done very easily, because usually it’s only a single page you have to fill in. You can then send it back along with a sample invoice and an A/R aging report.
- That same day you can get an email from them with their proposal. The email will mention how much you can get on your invoices and the fees involved.
- You then send over your first set of invoices, and in a few days (or even in 24 hours) your money will be deposited to your bank account.
That’s the factoring process, in its simplest sense.