Leveraging Your Accounts Receivable

Every month your business sends out invoices and then just has to wait and wait and wait for them to be paid.  You sometimes get the feeling like they are just sitting there collecting dust even though you have expenses you need to cover such as payroll, rent/mortgage, and your electric bill. An unpaid invoice is just an unpaid invoice, right? Wrong, there are ways you can leverage your accounts receivable to put them to work for your business, so they don’t just collect dust.

Accounts Receivable Factoring
Accounts Receivable Factoring, which is often referred to as Invoice Factoring, is one of the best and easiest ways to leverage your accounts receivable.  It puts your accounts receivables to work for you by speeding up your company’s cash flow and providing a source of ongoing working capital. Once you select the right factoring company to partner with your business, there is typically a fairly quick application process. They will need you to complete an application and submit a few key pieces of financial information such as accounts receivable aging, accounts payable aging, income statements and balance sheets. They will also take a look at your clients to make sure they are creditworthy, this is one important benefit of factoring, as they consider your client's credit to be more important than yours.

Once the application process is complete, all you have to do is submit a copy of your invoices to the factoring company once you submit them to your client. They will then advance you a set percentage of the invoice minus a reserve. They then wait for your client to pay and once they do they send you the reserve minus their fee.

Earned But Unbilled Accounts Receivable Financing
Earned But Unbilled Accounts Receivable Financing takes it even a step further by allowing you to leverage your accounts receivable before you have even sent your invoice to your client. This is especially beneficial for companies such as IT Consulting, Staffing and those with Government contracts as the terms of these contracts often limit the invoicing frequency. With Earned but Unbilled Accounts Receivable Factoring you can receive immediate working capital from a finance company such as Federal National Commercial Credit, once you have provided services that are outlined in your contract regardless of if they have been invoiced yet. 

Is Leveraging Your Accounts Receivable Right For Your Company?
The good news is there are ways you can leverage your accounts receivable to get access to the working capital your business needs. However, these options may not be right for all situations. Contact Federal National Commercial Credit today at (800) 523-0881 and our experienced team will help evaluate the right financing situation for your company.