I began using a Outsource Financial Factoring 20 years ago. 1 year after starting the business. After putting up with Brokers that took 50,60,even (90) days to pay their obligation. I too decided it would cost more to hire a collection individual than it would be to pay a factoring company.I can count on ONE hand the number of brokers that have a check on the desk in 30 days. Others - They all say we pay within 30 days of processing the invoice. Right!first they take 2,3,4 weeks to process the invoice/bill sent, then on the 30th day they pay the invoice, Then, they wait a few days to mail it...from the git go already 50-60 days have past plus mailing. A little spin on "30 days" I'd say.
Kirk Donnell - 4 years ago
Agree with Jeffery - Depending on the services provided by the factor... Not all factoring companies operate the same. Some put a strong emphasis on collections and have solid collections departments while others do not. Find out what is offered and find the factoring program that best fits your needs. Not all factors are good but not all are bad either. What factoring program works for one carrier may not work for another. But there's no better cost savings option for collections than to partner with the right factoring company. Best Advice: REVIEW THE AGREEMENT before you sign, understand what you're signing up for - and by all means NEVER sign a factoring agreement that locks you in for a set period of time. There is zero benefit for a carrier to be stuck in a relationship with their factor for a set period of time. Factoring is best used as a short term bridge to help companies in a cash flow crisis due to either rapid growth or unforeseen financial circumstances out of the carriers control. As those circumstances change, the carrier should always have the freedom they need to aim for THEIR success.
The cheapest collection employee you can hire to keep up with your invoicing is a factoring company. A good one. Think about the time that you spend meeting the needs of each broker. You can not pay an employee to do that any more. The cheapest rout is factoring. Go with a large factoring company.
Get paid today. Let them worry about it.
I began using a Outsource Financial Factoring 20 years ago. 1 year after starting the business. After putting up with Brokers that took 50,60,even (90) days to pay their obligation. I too decided it would cost more to hire a collection individual than it would be to pay a factoring company.I can count on ONE hand the number of brokers that have a check on the desk in 30 days. Others - They all say we pay within 30 days of processing the invoice. Right!first they take 2,3,4 weeks to process the invoice/bill sent, then on the 30th day they pay the invoice, Then, they wait a few days to mail it...from the git go already 50-60 days have past plus mailing. A little spin on "30 days" I'd say.
Agree with Jeffery - Depending on the services provided by the factor... Not all factoring companies operate the same. Some put a strong emphasis on collections and have solid collections departments while others do not. Find out what is offered and find the factoring program that best fits your needs. Not all factors are good but not all are bad either. What factoring program works for one carrier may not work for another. But there's no better cost savings option for collections than to partner with the right factoring company. Best Advice: REVIEW THE AGREEMENT before you sign, understand what you're signing up for - and by all means NEVER sign a factoring agreement that locks you in for a set period of time. There is zero benefit for a carrier to be stuck in a relationship with their factor for a set period of time. Factoring is best used as a short term bridge to help companies in a cash flow crisis due to either rapid growth or unforeseen financial circumstances out of the carriers control. As those circumstances change, the carrier should always have the freedom they need to aim for THEIR success.
The cheapest collection employee you can hire to keep up with your invoicing is a factoring company. A good one. Think about the time that you spend meeting the needs of each broker. You can not pay an employee to do that any more. The cheapest rout is factoring. Go with a large factoring company.
Get paid today. Let them worry about it.