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Without a solid financial management plan you might as well be throwing money out the window. The sad truth is that companies are doing this every day without being made fully aware. When unpaid invoices pile up, business owners often view the contracts as pending. But what they are really doing is provide their service for free and on their own dollar.

When invoices pile up, businesses can face serious cash flow problems. They may face problems in paying for inventory, paying their utilities and even make payroll. The answer to problems like this can be found within the folds of invoice factoring, a service that awards fast and instant cash while cleaning up any mess that may exist between a business and its clients.

What is Missing from Your Financial Management Portfolio?

There are a number of factoring companies out there that provide services that big banks refuse to touch. They award the needed funds while collecting your invoices leaving you free to run and manage your other affairs. They also examine your ledgers and troubleshoot management efforts.

Receiving funds

It can take months and even a year to get paid on piled up invoices. You can find a factoring company that can advance you the cash based on your total amount due from outstanding contracts.  The money appears in your account within 24 hours and the service provider takes on 100 percent of the credit risk. Most factoring companies provide their services with no upfront fees and only require a simple and fast credit check. If approved, a company that offers good rates should award the business up to 96 percent of the amount owed to them with the remaining 4 percent going to pay for the service fee. As a general rule, hovering around this rate is advised.

Say no to traditional money lenders

Traditional business loan companies often hurt businesses in the long run. According to an article published by Forbes, merchant money lenders have drained entrepreneurs of sacred capital at annualized rates as high as 70 to 90 percent.

Invoice factoring is a service that any business can benefit from. Its low rates and instant release of funds save businesses and stimulate local economies by moving capital and keeping people employed.

Say no to big banks

Trying to get a bank to offer the same service an invoice factoring company provides is like trying to convince Dick Cheney to attend a dinner hosted by Green Peace—neither will happen. Cash flow problems occur with almost every business out there, especially if you are in your start-up year. And like merchant money lenders, big banks also rip huge chunks of meat from the financial bones and leave entrepreneurs with meager scraps.

What invoice factoring offers

Big banks and traditional money lenders offer very little to business solutions. However, accounts receivable factoring offers a wealth of benefits in restoring financial order to businesses. Here are eight services that an invoice factoring organization tackles:

•  Accounts receivable factoring
•  Credit card factoring
•  Construction factoring
•  Freight factoring
•  Non-resource factoring
•  Invoice factoring
•  Spot factoring
•  Small business factoring

Go online and do some research. You will find that financial factoring services are indeed the backbone to maintaining growth and development in the small business marketplace when cash flow problems arise.

About Denny Jones

Hi there! I am Denny, a personal finance blogger and I love to share tips related to managing finance for a better living. Follow my blog for lots of fresh and exciting tactics to control your finances.
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