All accounts receivables financing companies, also known as factoring companies, provide the same essential services. They provide working capital when you need it based on the accounts receivables you sell, the risk involved, and the fees charged.
However, not all accounts receivables financing companies only provide this basic service. There is a handful of top companies capable of working with businesses in the United States offering well beyond the basics. These companies can serve as a strategic business partner for a small business providing both risk mitigation as well as credit monitoring services.
If you are currently using an accounts receivables financing company digging deeper into the services they provide can be insightful. It will also determine if they are giving you the edge and support you need in your business.
Credit Management Tools
Only a very few accounts receivables financing companies can provide a small business with credit management and risk monitoring tools. The companies offering this extra service will give you an advantage over your competition and are well worth tracking down.
Tools and reports should be easily accessible through your secure account with the factor. This allows you to utilize the tools and reports at your convenience and when you need them.
When the factor is determining the creditworthiness of your buyer, having the credit decision based on real-time performance data is essential. Many factoring firms use only traditional data sources for credit and risk information. These sources can be outdated, inaccurate, and lead to poor decision making and increased risk.
Risk Assessment Protocols
The best companies providing accounts receivables financing will have their own established, tested and highly accurate risk assessment protocols. The protocol provides the structure to assess the information collected and to minimize bad debt risks and to maximize the timely payment of invoices.
Data from a variety of sources is used and analyzed by the factoring firm. The firm will use due diligence to include current and relevant credit insurance data and assessment that is up to date and as accurate as possible. This work should be done as part of the fees charged by the factor, and not as an additional fee over the rate quoted.
Through supporting a small business with credit monitoring and risk mitigation services, an accounts receivables financing company becomes your partner in business. The information they provide can be used to make the most efficient and informed decisions to ensure creditworthy clients and limited risk when extending credit on any contract.
At United Capital, we do more than provide accounts receivables financing for businesses. To learn about the ancillary service we offer to our clients go to.