What are the best tips for building factoring?
Factoring receivables allows construction companies to get a backup from an unconventional creditor against the current open invoices of the company. This type of financing is an important source of cash flows in construction and can compensate the company against the time of donor and slow payments from customers. Finding a house in the first place, finding a quality factoring company, selling only what needs to be sold, and remembering the risk of failure there are four tips for navigation in the construction factoring process.
The introduction of the house in the order before the first contacting of the construction factor will help to facilitate this process. The factoring company buys open invoices and carries out the process of collection in exchange for a fee. The factoring company has more freedom to decide on financing than the average bank, but requires proof that the company's customers will pay for a reasonable period of time. Before contacting construction factoring companies in business -záznouznis should reflect both long -term relationshipsWith customers, so consistent payment formulas. The factoring company will have direct contact with many loyal customers because it is a process of collection on open invoices. Approaches to the customer service of the organization for construction and companies should be similar. Customer alienation during collections is likely to be influenced by future business opportunities and the overall reputation of the company.
Only the number of invoices that need to be sold should be sold. There is no requirement for all receivables or any specific percentage to be provided to a third party. Initially, it may seem attractive to take into account all invoices in the cash favorite, which will allow the company to grow beyond the actual claims, but there is a value in that they do not develop absolute dependence on any possibilities of individual credit in case the source of financing in the future.
The default is always the risk.Successful cooperation with a factoring company requires the same attention to timely payments as any other credit relationship. Sell only open invoices of customers who historically paid their accounts within the set time limits. If you sell invoices of customers who do not pay or pay, it will damage the position of the company with the creditor, making it difficult to obtain the financing of receivables in the future. Avoid factor of invoices of new customers without the history of payments and current customers who have had difficulty paying in the past.