Do your customer slow-pay on purpose, you may be surprised at who’s admitting to it.

Is the long tail of your suppliers killing you? The growth of your company may be suffering due to the actions of slow-pay customers. This is not acceptable and we know a simple and easy way to fix slow-pay accounts.

Over half (57%) of international businesses surveyed by Basware and MasterCard admit to having actively delayed paying their suppliers in the past 12 months.

This can be solved with by enabling working capital optimization also know as Factor financing (receivable invoices) which allows buyers to better manager their cash flow and for suppliers to get paid sooner.

“When three quarters of businesses have more than 50 suppliers and about two thirds send and receive more than 100 invoices a month, a culture of late payments impacts individual organisations as well as the economy as a whole,” said Esa Tihilä, CEO at Basware.

SLOW-PAY RECEIVABLE ACCOUNTS ECONOMIC SUPPLY CHAIN KILLER

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When asked –

  • Three quarters (70+ per cent) of decision makers think late payment is a fact of business and will always happen, despite 90 per cent acknowledging that payment delays have wider repercussions for businesses, such as the ability to pay staff or reduce investment.
  • Only about 1 in 4 businesses today have automated processes to manage payments efficiently
  • Two thirds (67 per cent) acknowledged that they have used payment terms as a strategic tool to help manage cash flow

If your business is tired of slow-pay accounts and strenuous cash flow gaps then click here to compare invoice finance offers..FREE! Unlock cash when you need it, as soon as you need it! More working capital at your fingertips in a matter of a few hours.

NOTE: LOUDHOUSE surveyed 1,015 strategic decision makers with a view of both Accounts Receivable and Accounts Payable processes and issues across ten countries (Sweden, Finland Norway, Germany, UK, Denmark, Netherlands, Belgium, US and Australia) in mid-2014 to gather the above metrics.

Simply put, The History of Factoring (invoice finance)

The History of Factoring

Factoring has existed for thousands of years;

What does ancient Mesopotamia and the Roman Empire have in common?  How about the East India Trading Company, Hudson Bay Trading Company, and the Massachusetts Bay Colony?  Each of these civilizations and businesses use factoring as a way to grow their economy and/or fund their business endeavors.

In ancient Mesopotamia (1754 B.C.), there is a well preserved babylonian law code titled the, “Code of Hammurabi.”  The sixth babylonian king, Hammurabi, enacted the code and it covered such things as trading, punishments, and other laws meant to govern with justice.  This is one of the first preserved written records that mentions factoring type transactions.  The Roman Empire also has evidence that they sold their promissory notes at a discounted rate.

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Factoring was a way of life in England well before the 1400’s, and the pilgrims brought this form of financing with them to the Americas.  Even the Mayflower and the expedition to Plymouth were funded by factor financiers out of London.  Once the early American colonies were established, factoring remained an integral facet to the health of the economy.  Goods like fur and timber were shipped back to London to be sold.  Factor financiers were able to provide the funding the colonist needed while the goods were being shipped, but also collect the debt for the goods from European buyers in London when they arrived.

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There are three distinct qualities of factoring:

  1. It is not a loan.  It is the purchase of an asset.  In this case, the asset is the outstanding, or open, accounts receivable invoice.
  2. The credit is based on the receivables and not on the businesses itself.  Factors review the creditworthiness of the debtor.  Again, the debtor is not the one receiving the money for the accounts receivable invoice at the discounted rate.  The debtor is the one whom the product/service has been provided and owes the business money (the debt).  That is the person or entity the factor is most concerned with.  Is the person who owes their monies credit worthy and will they pay?  
  3. There are three parties directly involved: the factor who purchases the receivable, the one who sells the receivable, and the debtor who has a financial liability that requires him or her to make a payment to the owner of the invoice. In the case of a loan, there are two parties;  the lender and the debtor.  In factor finance; the seller, the factor finance company, and the debtor all play an intricate roll in the factoring relationship.  In fact, if the debtor is not making payment, the factor will give notice to both the debtor and the seller and if need, take further action to retrieve those funds.

Great civilizations, amazing historical advances, and economic stability are all proof of factor financing at it’s richest and most profitable. Until now, a small to medium size business, looking to factor finance their receivables / assets has been at the mercy of traditional discovery; searching through mountains of information, assessing risk with little or no real comparison and overwhelmingly  trying to find the best deal to help their company succeed.

So what sets factoring apart today, from 1000’s of year ago? Technology! Smart business owners looking for leverage to negotiate the very best financial deal for their company will find a better alternative to traditional factoring called Factor Bid.

Factorbid.com matches business owners looking to sell their account receivables with competing factor finance companies, eager to buy those receivables for immediate cash. When you submit your accounts receivable invoice using factor bid, factor finance companies compete for the opportunity to earn your business and buy your outstanding A/R Invoices. You get the leverage and knowledge you need to negotiate the best deal with the least amount of effort and work.

Factor bid is easy to use and only takes about 2 minutes to get set up. Within the hour competing factor finance companies will be fighting for the opportunity to service your receivables and get you immediate capital to run your business.

You seriously have to wonder what the history of factoring would have looked like with a competitive system in place like factor bid. What type of voyages could have been even more successful, providing more supplies, with less liability and more available capital to leverage and stockpile goods, enhance trade commodities and increase supply chains.

Factor bid is a FREE RESOURCE for business owners. It’s recommended that you get a few offers from competing factor finance companies before deciding which factor finance partner is right for your business needs. visit factor bid now to get started and get paid as soon as today!

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Happy Factoring!