How to choose a factoring company in atlanta
http://www.accountingfacts.net/articles/6121/1/How-to-choose-a-factoring-company-in-atlanta/Page1.html
Michael Moss
Michael Moss is president and CEO of MDS Funding LLC, an invoice factoring company in Atlanta, that helps businesses improve their cash flow. For more information about how invoice factoring can provide your business with quick cash in as little as 24-48 hours with NO debt, NO banks and NO loans, visit http://www.MDSFunding.com, email cashflowconsultants@mdsfunding.com or call 866-394-4637. By Michael Moss
Published on 01/13/2010
Factoring companies are a resource to thousands of businesses, but how do you choose a factoring company? Follow our helfpul hints for ways to pick the factor you do business with. A little homework now can save you lots of potential headaches later. And you'll be educated about how to pick a factor that meets all of your needs.
How to choose a factoring company in atlanta
A factoring company is the right resource for companies that need to turn invoices into quick cash. But, choosing the wrong company can lead to sleepless nights. Your factoring company is an extension of your company.
After all, they will collect your discounted invoices from your clients. So you want to be careful about the type of company you choose, just as you would be cautious about the type of financial institution you do business with.
Invoice factoring, an advance on discounted invoices, is a financial transaction. So do your homework to choose the best company for your business.
Let's start with a few of the basics.
*Make sure your business is the right fit for financing. Although factoring is a financial lifeline for thousands of businesses around the world, factoring may not be right for your business.
Generally, factoring is ideal with businesses with at least $5,000 in monthly invoices. Some companies want a minimum of $10,000 in invoices. You need this amount to make sense for you and the factoring company.
*Now, consider the companies that owe you money. The more established they are, the better. Your credit won't come under scrutiny, but the company will look at the financial health of the company who pays the invoice.
The more established and the longer they've been doing business with you, the better. Invoice factoring companies like to see a track record of your client paying their invoices.
If it's a large client with a good credit rating, all the better. The factoring company trusts your client to pay them back, so the more financially stable they are, the more likely you are to get factoring.
*Compare rates. Find four to six factoring companies and compare their rates. You'll want to also make sure that the company you hire is professional and experienced. Your invoice factor shouldn't act like a disgruntled bill collector and harass your clients.
Rather, they should act as an extension of your firm -- firm but polite. Try to see how your factor does business. Review their collection letters, sit in on phone calls and investigate how they conduct their business.
You don't want to lose a client just because the account receivables financing company you hire is unprofessional. Find out how they deal with overdue accounts and when they get a collection agency.
*Find the right match. Some companies deal with small amounts while others routinely do six figures a month. Ask potential companies what their volume is and select accordingly. If you're a company that only deals with a small amount, you may want to consider factors that are used to dealing with smaller transactions.
*Get a specialist. Not every company is right for every client. If you need specialized factoring, such as medical factoring, health care or construction equipment, consider hiring a company that specializes in these areas. These types of companies are likely to service your needs better than a company that only deals with one type of client.
*Consider technology. Companies often use online invoicing systems that allow you to submit information online, review payment history and get cash quicker.
Follow these tips for a positive experience.
After all, they will collect your discounted invoices from your clients. So you want to be careful about the type of company you choose, just as you would be cautious about the type of financial institution you do business with.
Invoice factoring, an advance on discounted invoices, is a financial transaction. So do your homework to choose the best company for your business.
Let's start with a few of the basics.
*Make sure your business is the right fit for financing. Although factoring is a financial lifeline for thousands of businesses around the world, factoring may not be right for your business.
Generally, factoring is ideal with businesses with at least $5,000 in monthly invoices. Some companies want a minimum of $10,000 in invoices. You need this amount to make sense for you and the factoring company.
*Now, consider the companies that owe you money. The more established they are, the better. Your credit won't come under scrutiny, but the company will look at the financial health of the company who pays the invoice.
The more established and the longer they've been doing business with you, the better. Invoice factoring companies like to see a track record of your client paying their invoices.
If it's a large client with a good credit rating, all the better. The factoring company trusts your client to pay them back, so the more financially stable they are, the more likely you are to get factoring.
*Compare rates. Find four to six factoring companies and compare their rates. You'll want to also make sure that the company you hire is professional and experienced. Your invoice factor shouldn't act like a disgruntled bill collector and harass your clients.
Rather, they should act as an extension of your firm -- firm but polite. Try to see how your factor does business. Review their collection letters, sit in on phone calls and investigate how they conduct their business.
You don't want to lose a client just because the account receivables financing company you hire is unprofessional. Find out how they deal with overdue accounts and when they get a collection agency.
*Find the right match. Some companies deal with small amounts while others routinely do six figures a month. Ask potential companies what their volume is and select accordingly. If you're a company that only deals with a small amount, you may want to consider factors that are used to dealing with smaller transactions.
*Get a specialist. Not every company is right for every client. If you need specialized factoring, such as medical factoring, health care or construction equipment, consider hiring a company that specializes in these areas. These types of companies are likely to service your needs better than a company that only deals with one type of client.
*Consider technology. Companies often use online invoicing systems that allow you to submit information online, review payment history and get cash quicker.
Follow these tips for a positive experience.