Factoring
Quotes Business Banking
and Factoring
Factoring Quotes Business Banking and Factoring
Choosing
the correct invoice factoring company from the many factoring
companies on the market; an invoice factoring company which
matches the thinking and ethos of your company is vital to
the service working for you.
Factoring
Quotes help you find the factor which suits your needs best
by working closely with the best in the UK and using their
experience to get you competitive quotes and, more importantly,
first class service. Factoring Quotes' partners offer from
the full range of factoring services such as invoice factoring,
sales ledger management and credit insurance.
Factoring
Quotes - what is factoring?
Factoring
works as follows: The factor fully manages your sales ledger
and provides you with credit control and collection services
of all your outstanding debts. The invoices you issue upon
a sale are sent to the factor who typically advances up to
80 to 90% of the invoice amount to you. The balance, less
charges, is paid when the customer makes payment directly
to the factor. The service is disclosed to your customer who
typically receives a letter from the factor, or attached note
to your invoice, containing payment instructions to the factor.
Funds
are typically released to you within 24 hours of issuing the
invoice.
There
are typically two costs involved: a service charge expressed
as a percentage of sales factored and an interest charge for
the cash advances. The service charge, covering sales ledger
management, collections services and, if you wish, bad debt
protection can range between 0.60% and 3.0% of turnover. The
main considerations in determining the service charge are
your annual turnover, number of invoices and number of customers.
The interest charges calculated on the daily usage of funds
is typically comparable to normal secured bank overdraft rates.
When
the risk of bad debts remains with you the service is referred
to as recourse factoring. Non-recourse factoring protects
you against customers who fail to pay. The factor typically
covers this risk by taking out credit insurance. The cost
of the credit insurance is passed on to you and depends on
the risk profile of your customers and the amount you factor,
typically between 0.3% and 0.7% of turnover. You also agree
on coverage limits with the factor, normally 80-95% of the
factored amount.
Many
factoring companies provide Internet access to your account,
allowing you to constantly monitor your sales ledger and individual
customer details. Paper can be eliminated by electronic transfer
of your invoices from your PC to the factor.
Getting
the proper factoring company which will work with you as a
"partner" instead of accompany is vital to you getting
the most out of factoring for your company.
For
further information on Factoring Quotes Business Banking and
Factoring visit the Factoring Quotes Website.
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