Debunking Popular Myths about Business Invoice Factoring
Customers considering business invoice factoring may be on the fence due to certain myths concerning the process. Some thoughts about it are true, but some are far from the truth. Follow along as we debunk some common myths about it and discuss how they got started and what is untrue about them.
A common myth when it comes to business invoice factoring is that the customers get bullied or harassed. This is not the case. IN fact it has been shown that business invoice factoring can help bridge invoice payment with upfront payments. These payments typically account for around 90% of the total invoice amount. This method is far more beneficial compared with paper invoices as it can save more than 50% of costs.
Business Invoice Factoring Means the Business is in Trouble
There is some speculation that when companies hire a business invoice factoring corporation that it means their business is in trouble. This couldn’t be further from the truth. Previously this process was only associated with a business which had run into financial stress, but that is not the case today. Business invoice factoring does not signal that the company you are dealing with is in financial trouble, and this should not be a cause for concern.
Past Due Invoices
Another myth associated with business invoice factoring is that they only deal with invoices that are past due. This isn’t true, and as a matter of fact businesses use this service for more than just invoices. Trucking factoring services, transportation factoring and other business factoring helps in a variety of ways with a multitude of issues. Local and international factoring not only provides services with invoice funding but they also help negotiate discounts from suppliers, boost working capital of the business and they help to reduce or replace business overdrafts.
Customers are Against it
Another common myth is that customers aren’t keen on the idea of a business using invoice factoring. This isn’t the case as in most cases business invoice factoring can be used confidentially so that customers will not even know that these services are being used. Majority of companies have no problems knowing that businesses use factoring, but most of the time it is hardly even known that this process is used.
Lengthy Long Term Contracts
Many companies believe that they will get locked into a lengthy long term contract when they choose to utilize business invoice factoring. Not only is this not true, but it is not good business practice either. Finding services that are directly tailored to companies is the best way to handle this service, and that cannot be done with a one size fits all mentality. This means that your business needs will be carefully considered before a tailored plan will be worked out to focus solely on those needs and nothing more. Getting what you pay for saves you money and ensures that the services are true and necessary.
Now that you know some of the scary things about it aren’t true you can rest assured when it comes to considering business invoice factoring. You can forget the myths and focus on getting the best services that will meet the needs of your company. The best practice is to always research information yourself before simply believing myths, but since that has already been done for you, the process can be as easy as possible.