Accounts receivable financing is a popular way to deal with unpaid invoices. When you have accounts receivable of any value, it’s important to collect in a timely fashion. If it has been going on 30 or 60 days and there are open invoices, it might be time to explore financing so that you can accomplish an array of goals within your business.
1. Reset Your Accounting Standards
Waiting 30 days, 60 days, or even longer might not be an option for you on a regular basis. By factoring receivables, it’s a chance to reset your accounting standards. A third party will collect the invoices and provide you with a percentage of the total value. From there, you can choose to change up your payment terms going forward.
2. Get an Influx of Money
You might not have the means to pay employees or your own invoices because of waiting on payment of invoices from your customers. Rather than go into a situation where you jeopardize your operations, it’s easier to explore accounts receivable financing in order to get an influx of money.
3. Make an Equipment Investment
A new piece of equipment might be needed to keep your operation running. If you don’t have the money to make the investment, you can look at factoring finance accounts. The money could be much needed to be able to make the purchase and take your business to the next level. Additionally, the percentage that you take for factoring might level out when you can pay cash on equipment as opposed to financing it.
4. Take Advantage of a Marketing Opportunity
Sometimes, marketing opportunities present themselves at random times. If you see an opportunity that could be great for your business, you should take advantage of it. If money is stopping you, then factoring receivables could be the solution you need.
5. Attend a Special Event
By using invoice factoring Canada companies get the money they need to attend all sorts of events. It could be a conference, a workshop or even a trade show or fair. If it’s going to help your business in some way, you should look at the various ways to get the money so that you can be in attendance.
Every company has their own reason for factoring receivables. Knowing why you should do it will show you that there is a way to get the money that you need for your business without taking out a loan.