Even when you have built your company from the ground up, there may be aspects of your business of which you only have a basic understanding. One reason why many businesses overlook factoring accounts receivables is because they know little of the process and do not work directly with the accounts receivable department. Knowing what accounts receivables are and their value can help you understand when and if factoring is a good option for your business.
Accounts Receivable Defined
Simply defined, accounts receivable is the money that is owed to your business for services performed or goods sold. It is an asset for your business that plays into the total value of your company. Accounts receivable is the money owed, regardless of whether or not it has yet been paid. Due to the nature of accounts receivable, customers that have not paid for the goods or services they have received can be taken to a court of law and be ordered to pay.
How Are They Valuable?
Since accounts receivable are an asset, they are something that could be won or lost in a court of law. They are also something that can be used to help you obtain financing. It is money that is coming into your business one way or another. One way that even unpaid accounts receivable can bring money into your business is through factoring.
Factoring is the process of selling of accounts receivable to a factor. You sell your unpaid invoices to a company like Universal Funding. We pay you, then we collect the invoice amount from your customer within the terms you’ve agreed upon. Thus, if you are still waiting for your customers to pay the money you are owed, you can get that money quickly without the stress of waiting through factoring.
Learn More With Us
Your accounts receivable are a valuable part of your company. If your business generates roughly one to 40 million dollars annually, contact Universal Funding to see how factoring can benefit you. You can also fill out our convenient online rate form for a faster response.