Entering into a business transaction with a factoring receivables company is an important decision that many companies will contemplate. Just like deciding who to purchase supplies or inventory from, or who to bank with, this is a relationship that you should carefully consider to make sure that you’re working with a reputable, ethical, and dependable business before you sign the contract. Here are three things your factoring company should have.
Great Customer Service
When you sell your receivables to a factoring company, they can assist in a variety of accounts receivable responsibilities. They can invoice your customers and ensure your invoices are sent compliant per your contract terms. The factoring company can also send monthly statements, as well as communicate as your accounts receivable department. Universal Funding sends statements out twice per month.
Make sure you’re working with a factor that knows the value of relationships and works hard to maintain those relationships and ensures compliancy as well. Universal Funding has Certified Account Executives overseeing all transactions and interactions for you to rest easy.
Experience in Your Industry
Factoring can be different depending on the industry that you work in—the needs of a transportation company will vary from those of a staffing agency, for example. Talk to your factoring company about their experience working with other businesses like yours to make sure they understand your needs and your industry before you sign the contract. Experience in your field probably means they can offer the best terms and conditions for your contract.
Fees, Rates, and Services
When you decide that factoring is the right move for your business, the next step is to make sure you’re getting the best possible return. While you need the immediate cash flow, you don’t want to sign up with a company that charges ridiculously high fees, or doesn’t provide the right funding options. Be sure to carefully consider things like:
- They are the direct funding source and not a referring agent
- Whether lines are recourse or non-recourse
- Whether they charge additional fees for things like customer credit checks
- Online account management options
- Whether the company offers tiered payments, returns some of the fees upon client payment, or holds money in reserve for risky clients
Universal Funding is an established factoring company that offers low rates, has an online portal for account management, and is upfront with additional fees. Before you sign on the dotted line, make sure your factoring company has the right experience to provide you with top-notch customer service and the funding your business needs. Call Universal Funding today to discuss our factoring options, or fill out our online rate form to get more information.