Owner: Accounts Receivable Factoring by Ozarks Capital Funding URL:http://www.ocflink.com/blog/ Join Date: Sat, 12 Apr 2008 12:35:26 -0500 Rating:0 Site Description: Our blog describes the ins and outs of factoring accounts receivables, a financial tool used to provide working capital for businesses. Site statistics:Click here
Using Purchase Order Funding 2008-05-28 08:21:00 Accounts receivable factoring is used when the goods or services have been accepted by the customer and an invoice has been generated. The invoice is submitted to the factoring company in order to receive an advance. The risk to the factoring company is that the customer won’t pay the invoice. Therefore, the creditworthiness of the [...] Read more:Purchase
, Order
, Funding
Fraud at Cox Health Systems - Part II 2008-05-29 13:10:05 I received a comment to my first blog concerning the Medicare fraud investigation of Cox HealthSystems
, based in Springfield, Missouri. The comment was very well written and articulate. Although the author chose to remain anonymous, I have a gut feeling he or she had some affiliation, perhaps on an executive level, with Cox.
I agree [...]
Arrows in Your Quiver 2008-06-01 09:39:22 Despite the fact that invoice factoring continues to grow in volume year after year, most business owners don’t even know that option even exists. Many that have heard about factoring are leery about using it because of the incorrect stigma that the financing companies are synonymous with loan sharks. That myth grew from decades ago [...] Read more:Arrows
Medical Receivables Factoring is a Different Animal 2008-06-04 07:47:41 There are far fewer companies that provide medical receivables factoring services than do funding for manufacturers, distributors, and service companies. Healthcare factoring is a specialized niche that requires a tremendous amount of insight about the intracacies of medical billing and how it relates to third party payors. At the onset of a medical factoring relationship, an estimate i Read more:Animal
The Components of Invoice Factoring 2008-06-08 20:55:16 We try our best to explain the pros and cons of invoice factoring. We don’t pretend that it is a good fit for all businesses. But accounts receivable factoring has been a viable financial tool for many companies in need of working capital. For those that are thinking about factoring invoices, this [...] Read more:Components
, Invoice
Understanding the Reserve 2008-06-11 08:00:18 When submitting an invoice for advance, the factoring company withholds a reserve. In other words, the client doesn’t get the full face amount of the invoice. They receive a predetermined advance rate that is applied to the invoice. The reserve is the difference between the invoice amount and the advance.
It is very important to understand [...] Read more:Understanding
, Reserve
Customer Verification of Invoices 2008-06-15 14:04:46 At the inception of an invoice factoring relationship, it is necessary for the funding source (the factor) to verify information contained in the application. For example, if the client wishes to begin receiving advances on invoices issued to XYZ company, the factor will call XYZ to confirm that the invoice amount is correct, that all [...] Read more:Customer
, Verification
Long Term Receivable Financing 2008-06-18 08:30:17 Accounts receivable factoring has been in existence for several decades and is a great financial tool for companies that require immediate working capital. The receivables financed are short term in nature, typically less than 90 days. Until now, there hasn’t been a product that funded long term income streams in the marketplace. A new program [...] Read more:Financing
, Long Term
Due Diligence 2008-07-02 08:17:12 When a company wishes to use accounts receivable factoring as a means of acquiring working capital, they fill out a simple application and provide supplemental information that the factoring company requires. Information about customers, an aging schedule, and banking information are all part of the application process. Once the factor determines the company [...] Read more:Diligence
What Companies Quality for Factoring? 2008-06-29 21:16:54 Invoice factoring can provide much-needed working capital to fuel a company’s growth or help them get through a tough period of time. But not every firm is a candidate for this type of financing. Those companies that have a pool of business to business accounts receivable can qualify, assuming their customers are credit-worthy. Here are [...] Read more:Companies
, Quality
Payments Must Be Made to the Factor 2008-06-27 08:06:20 When an accounts receivable factoring relationship is established, it is critical that the client and its customers understand that all payments must be made to the factor. When the factoring company advances funds to a client, they have taken ownership of the receivable and therefore have assumed the risk. This is spelled out very clearly [...]
Factoring and the Contruction Industry 2008-06-25 08:19:39 Owners of construction companies are frequently hampered by the lack of working capital, particularly when they’re involved in multiple projects. The dilemma is magnified when their funds are tied up in construction receivables. In many cases, materials must be purchased without the benefit of credit and employees must be paid weekly. This can cause a [...]
Running a Tight Ship Yields Results 2008-06-22 09:12:37 When an invoice factoring company evaluates an application for a prospective client, they very carefully review the company’s track record, management team, financial status, and credit-worthiness of its customers. This is called due diligence. Just like commercial lenders, factors have to evaluate their potential risk with each transaction. If a potential [...]
Factoring Invoices is Nothing to Be Embarrassed About 2008-07-15 21:17:25 Many companies in desperate need of working capital choose not to use invoice factoring because of the stigma attached to it. Owners and financial executives worry that their customers will surely think they are “going under” if they use accounts receivable factoring. The truth is that factoring has been a time-tested, convenient, and consistent source [...] Read more:Nothing
, Embarrassed
Factoring Offers Unlimited Capital 2008-07-11 08:15:32 When you need working capital and go to your local bank for a line of credit that is collateralized by accounts receivable, funding may be inadequate for future growth. A bank line of credit is usually fixed in nature, which is fine for those companies that are showing modest growth. But for those firms that [...] Read more:Offers
Completing the Application Process 2008-07-09 08:13:46 When we’re given a completed application along with the schedules and other information required, we can usually establish an invoice factoring relationship in a week to ten days. I’m always amazed when a company calls and expresses a need to acquire working capital RIGHT NOW and then drags their feet in getting the application to [...] Read more:Completing
, Application
, Process
What Does the 4th of July Mean to You? 2008-07-06 09:58:11 I was standing in line at the grocery store a few days ago and couldn’t help but overhear two young women engaged in a conversation. They were both complaining about one thing or another, such as not getting enough attention from their boyfriends and being treated poorly by their mean bosses. It really [...]
No Offsets Against Invoices 2008-07-30 08:19:40 One of the cornerstones of accounts receivable factoring is verification that the invoice is legitimate and will be paid in full. In other words, once an invoice has been submitted to a customer, it is agreed that the goods or services have been 100% delivered and accepted. Since the factoring company is on the hook because of [...] Read more:Offsets
Factoring Companies Work With the IRS 2008-07-28 10:00:01 Many financial executives or business owners think that once they’ve fallen behind on their federal withholding tax payments and signed off on a payoff arrangement with the IRS, they are unable to utilize invoice factoring services. This is far from true. A company can still acquire the working capital it needs during those times.
While it [...] Read more:Companies
Minimum Amounts to Factor 2008-07-25 15:36:20 Many companies who work with companies to establish an invoice factoring relationships require a large dollar minimum per month. Those minimums can range anywhere from $100,000 to $200,000 per month. The reason is that roughly the same amount of time and effort is spent setting up an account of that size as one substantially less and [...] Read more:Minimum
Factoring Stabilizes Cash Flow 2008-07-20 08:06:20 Many companies experience an uneven amount of working capital. These peaks and valleys causes them to sometimes pay their bills late and keeps them from being able to take advantage of early payment discounts from vendors. An inconsistent cash flow results in many headaches for the business owner, including the inability to properly forecast [...]
Acquiring Working Capital After the Purchase of a Business 2008-08-13 07:50:07 Companies need cash flow to operate their businesses. Unfortunately, it’s getting harder to get working capital lines from a bank, even when purchasing a business. When conducting a cash flow budget for the intial months folloiwng the business purchase, it may be wise to factor invoices from the pool of accounts receivable that has been [...] Read more:Acquiring
, Purchase
, Business
Additional Services Factoring Companies Provide 2008-08-08 08:15:51 Invoice factoring companies provide a valuable service in supplying working capital to businesses, which allows them to reach their potential. Along with the funding, factors also offer other ways to benefit their clients, such as:
Credit screening: Accounts receivable factoring works best for both parties when the client’s customers have good credit and are likely to [...] Read more:Services
, Companies
Temporary Staffing Companies are an Ideal Fit For Factoring 2008-08-06 08:15:53 A well-run temporary staffing company can be very profitable, but can also be cash-poor and thus unable to its bills on time, much less grow. One of the biggest challenges of this industry is that the employees MUST be paid every week and the cash flow must be available to pay them. Unfortunately, most clients [...] Read more:Companies
, Temporary
Factoring Gives Doctors Ample Working Capital 2008-08-03 14:47:10 It wasn’t very long ago when individual doctors and physician groups could easily go to their local bank and get all the working capital they needed. Don’t get me wrong: banks still loan money for such purposes, but the underwriting requirements have stiffened dramatically. Thanks to the credit crunch brought on by the mortgage crisis, [...] Read more:Doctors
Dental Professionals Get Working Capital Through Factoring 2008-09-05 21:22:00 It wasn’t too long ago when working capital loans from a bank were easy to acquire for dentists and other health care professionals. Those days have changed dramatically. it’s not that banks don’t loan money anymore. The issue is the tightening of underwriting standards brought about by the sub-prime lending meltdown. Minimum credit scores of [...]
When You See an Ad for Ridiculously Low Rates, Be Leery 2008-09-01 21:20:18 You see advertisements all the time promising invoice factoring rates less than 1.6%. When you’ve been quoted a fee rate of 2.75% for thirty days, the natural inclination is to jump to the :”lower priced” factor. After all, the 1.15% difference in the rate can result in thousands of dollars of savings per year, right?
Unfortunately, [...] Read more:Rates
Due Diligence Audits for Medical Receivable Factoring 2008-08-26 08:00:01 Establishing a medical accounts receivable factoring relationship is more intricate than it is for a manufacturer, distributor, trucking company, or temporary staffing agency. That’s because in the case of the latter industries, the invoiced amount is usually fixed in nature. With factoring third-party medical receivables, the expected amount to be collected is cloudy. That’s w Read more:Diligence
Possible Barriers to Establishing a Factoring Relationship 2008-08-23 17:39:00 Invoice factoring is one of the quickest and most flexible financial tools available. There are, however, some rules that require consistent compliance:
Sales must be final: The goods must be delivered and accepted in good order or the service must be performed satisfactorily by the client.
Liens on the accounts receivable must be resolved: When a factoring [...] Read more:Possible
, Barriers
, Relationship
Planning Your Company’s Financial Future 2008-08-19 08:00:39 Whether or not you use invoice factoring to accelerate your working capital position, cash flow planning is critical to success and wealth-building. I’ve come across a program that helps businesses both large and small maximize their resources, plan for the future, and manage debt. Unlike other financial software, this one is easy [...] Read more:Financial
, Future
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