Josh Smith from Alpha Capital explains this perfectly in a LinkedIn post, Invoice factoring is meant to grow your company.

Make sure that the factoring company is being ethical and fair when dealing with your customers. Since the invoice factoring company is collecting the invoices directly, you don’t have control over your billing anymore. These fees include application fees, processing fees for each invoice you finance and credit check fees.

Invoice factoring can get expensive due to hidden fees. Let’s say you need payroll now so you turn to an invoice factoring company. The factoring company gives you cash to secure working capital to meet your expenses.

Once the factoring company collects a particular receivable, they will pay you the remaining balance of that receivables face value, less their fee. You can outsource your accounts receivables to a factoring company for a nominal fee. The factoring company will advance up to 90% of the invoice value in cash.

Factoring services not only ensure availability of the working capital but also makes sure that the cash flow is there for long term planning and growth of the organization. Invoice factoring has surfaced as an important facet of business financing in the past few years across Canada. fast factoring provide a free business review and monitoring system which is best suited for your business.

Accutrac Capital is a business solutions company that offers factoring solutions across Canada. More importantly, not to mention the increase in cash flow that an organization gets when associated with an accounts receivable financing company. A factoring company in Ontario will not only buy your account receivables (for a minimal fee) but would also provide consultation for a better credit risk management.

Factoring can be a viable business financial solution that turns accounts receivable into cash. Accutrac specializes in helping businesses to harness their accounts receivables into cash flow solutions. Many invoice factoring companies or as the industry calls them Factoring ” companies are willing to purchase accounts receivables in Canada.

Depending on whether the business has chosen recourse or non-recourse factoring, they may be required to pay back the advanced amount if their customer doesn’t pay. Invoice Factoring vs. Accounts Receivable Financing. Although the terms and turnaround can vary according to the industry, typically a business can sell their invoices to a factoring lender and receive a large percentage of the invoice total within 48 hours.

Be aware that, should you wish to end your factoring arrangement you will be required to pay back monies that have been advanced even if your customers haven’t paid yet. Firstly you will be charged a fee when the factoring company receives an invoice from you. To get your finance started the factoring company will firstly, want to meet you – to understand your business objectives and how your business operates.

The factoring company will send out invoices, reminders and statements on your behalf having agreed the process with you beforehand, but you keep control of the sales ledgers.