What is Accounts Receivable Financing?
Accounts Receivable Financing, also know as Receivable Factoring, is a transaction where a company sells (Factors) its Accounts Receivables, or invoices to a Factoring Company (such as Advanced Financial Services), in order to improve cash flow. With Factoring, the Client Company will have immediate cash available for payable, payroll, maintenance or improving equipment, or other working capital requirements.
Factoring transfers ownership of the Receivables to Advanced Financial Services The account debtor is then notified of the sale and then remits payment directly to Advanced Financial Services.
Factoring assists the you with the admin of maintaining an Accounts Receivable, sending statements and making collection calls so you can reduce internal overhead, or redirect resource to help your company grow.
Advanced Financial Services works in partnership with our clients, and provides services such as credit checking, risk management, collection services, and admin support to ease the burden, assist with supply decisions and ease cash flow.
There are three integral parts to any Factoring transaction.
The Fee – this is the amount that Advanced Financial Services will charge you for the service and the borrowing
The Advance – This is the percentage of the total invoice amount, that Advanced Financial Services pays you upon submission of that invoice
The Reserve – this is the remainder of the total invoice amount, help until payment by the account debtor is made
Is your cash tied up in unpaid invoices?
Advanced Financial Services can free up your working capital by financing your unpaid invoices for up to 90 days.
In addition to freeing up working capital, Advanced Financial Services provide services that can help reduce the administrative burden on you, and speed up your cash flow.
Advanced Financial Services will check the credit of your domestic customers, free of charge, so that you can make an informed supply decision. All contact with your customers will be in a professional and courteous manner, this allows your team to focus on growing your business. Advanced Financial Services will provide credit control and treasury management services to you, by collecting, processing and allocating payments to your accounts receivable.