Challenges Faced by Small Businesses and Tackling Them With Invoice Factoring

     Regardless of your ground breaking ideas, any business you start will always face some core issues. Perhaps the most vital of these is cash flow management, having a healthy cash flow is pivotal for any business however delays in payment can easily set you back and create stress within the company. Invoice factoring, which is a kind of a accounts receivable financing can help you overcome your cash flow issues which you can then use to tackle other issues.

What is Invoice Factoring?

Invoice factoring is a kind of financing solution where a factoring company purchases your overdue invoices at a discounted rate which can range from 85% to 98% of its original value. It then collects the money from the company’s customers and remits any outstanding balance back to the company. By doing so the business has cash immediately available for use, which it can then use to pay its bills, pay rolls and suppliers.

Challenges Faced By A Typical Business

Here is a list of issues that a business will typically face.

  1. 1.       Staffing & Payroll Payment: All businesses need to hire employees and pay them. However as the business needs to have its invoices paid first, any delays on that front can lead to delays in payment of the company’s staff. Such delays typically result is friction between the employees and the company’s management and the company can end up losing valuable workers. By opting for Invoice Factoring, you can be assured of having cash in hand so that you can pay your staff on time.
  2. 2.       Sales: Increasing sales is also another major concern that a business faces. However if you are always getting paid late, you are going to have to hold your plans back. Invoice factoring can allow you to create new products, improve on your services and look into more opportunities.
  3. 3.       Training Employees: With cash readily available, you can train new employees quicker and let them contribute to the company as well. You can also invest in training your managers and bringing them up to speed with the latest in management techniques and also arming them with the best tools required to increase the company’s bottom line.
  4. 4.        Managing Change within and Without the Company: Having more cash readily available will help you respond to changes in the market faster, fueling your company’s growth.

So, in short a lot of your company’s hassles can be easily tackled simply if you have cash in hand. If you are running the type of business which requires cash now rather than later, then it is even more imperative to at least consider opting for Invoice factoring.

In doing this you are also ensuring that you do not need to rely on a line of credit from a bank as your growth will be driven by your customer’s demand for your products and/or services. Give Invoice factoring a chance, it may just be the solution to your accounts receivable hassles you were looking for.