There are many variables besides just the “lowest” discount fee that will come into play when selecting the factoring company best suited to your company’s needs. This Article has the important things you should look for when picking a factoring company:
You can find several key attributes you should search for before picking the right factoring company for your business. A reliable factoring company should have a high quality credit department, a professional collection staff, a long history, financial strength, and current systems for keeping their customers informed with real time information.
In contrast to a standard bank or perhaps a finance company, factoring companies have a day-in, day-out relationships with regards to their clients, so selecting the right factoring company boils down to who can you see your business aligned with?
Generally, the response for this question is most likely the factoring company with the lowest discount fee and quite often it is the factoring company that fits various other needs better than the comapany with the lowest fee. In the end, determining the overall cost can prove difficult, so you may want to consider additional critical variables. Heres points to consider in order to pick the most suitable factoring company for you:
Does the factoring company have a fully staffed credit department?
Any factoring company that has a good credit department, could be your choice if you’re searching for a factoring company which will help you make prudent credit limits for your customers. A factoring company which does not have a fully staffed credit department is likely to not approve ideal credit limits and because of this, may expose your company to incorrect levels of risk. However, a factoring company in which does not approve enough credit to have capacity for your needs might entirely restrain your companies capacity to grow.
Does the factoring company have a collection department?
You just might pick a factoring company with a fully-staffed collection department.Why? Because It might stun you to know that a large number of factoring companies don’t have a collection department. For anyone who is considering choosing a factoring company which takes their duty of collecting receivables seriously, the factoring company will assign your business with two contacts: an account representative + a collection specialist.
This is important because factoring companies WITHOUT a collection department are forced to assign the task of collections to one account representative.
Does the factoring company have a good track-record?
A factoring company in which has been in business greater than ten years likely comes with the expertise needed to supply an quality level of service. A factoring company that’s endured various business cycles demonstrates effectiveness. However If in doubt, ask the factoring company you’re talking to for bank references or information about their financial shape. Most of all, ask your factoring company for client testimonials if possible customers that are in your industry.
Does the factoring company have a specialist in your industry?
You most likely are searching for a factoring company that knows your industry. Industry specialists are extremely vital. If you happen to run a staffing company, you should seek out a factoring company with staffing specialists. For instance a staffing factoring company will be familiar with your regulations and payroll needs and provide unique services such as payroll checks, payroll deposits, payroll reporting, payroll software, invoicing and invoice mailing. since, a staffing factoring company will certainly have their own first hand experience in dealing with hundreds of other staffing companies. If a staffing factoring company already knows your customers, you will save money because you will not need to spend money on credit reports.
Is the factoring company the best size for your company?
Perhaps you may be interested in a large or small factoring company, based upon your philosophy. Your best bet could be a factoring company that is somewhere in between small enough to provide personalised service and the means to access top management, then again large enough to deliver financial stability, the capacity to accommodate your needs, as well as the skill to survive challenging economic times.