Accounts Receivable Factoring - Take Advantage of your Biggest Asset (Part 1)
Take a good look at your detailed financial analysis and you may be in for a surprise. Many business owners are not aware that between 40% and 70% of your company assets are tied up in your Accounts Receivable. What if they were all of a sudden gone?
Precisely, your largest asset would be gone but your liabilities would remain the same.
Accounts receivable, sometimes ignored, sometimes neglected, are now the key to successful development of business. Money waiting to be taken unlike the goods your company sells, it no longer has to go through manufacturing processes, storage, transfer and placement with clients.
Accounts Receivable Factoring helps many companies convert this asset into much needed cash that can be used to generate more business.
All the Accounts Receivable that is tied up on your balance sheet and income statement represent 80% of your sales, but this is of little good to you until they have been converted into Working Capital. Accounts Receivable Factoring will do exactly this for you.
With all this, it is curious that the Business Owner even further considers the claim as a necessary evil and the collection as "the dirty part of the sale". Instead of investing in the professionalization and development of the area at the highest level of management of accounts receivable which Professional Accounts Receivable Factoring will do.
Having the Accounts Receivable department regarded as a necessary evil, is the last thing your company should do. If there are delinquent payments, often there are reasons for this which if handled properly will not only be collected but save your accounts. If there is a problem with a shipment or a product, this is where it will likely end up and service is more important here than anywhere else in the company.
Unfortunately, credit and collection areas do not have a profile of customer service and handling complaints in order to address these scenarios and what is more, the way it measures its performance does not help at all in the proper handling of relations with the internal and external customers as they invariably are evaluated for days on average it takes receivable (DSO or Days Sales Outstanding) and the percentage of past-due loans (% Bad Debt) and this means that no matter what you have to do, collect as much as possible regardless of the customer relationship.
A Professional Accounts Receivable Factoring Company will make sure the accounts are handle properly, not a Collection Company but an Accounts Receivable Management Service.