Improve your Cash Flow by Selling Your Accounts Receivables for Upfront Payment

By: funding30
June 24, 2013 at 11:17 am

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Most businesses these days are very flexible when it comes to their clients making payments. In fact, most payment options include payments broken down to small monthly increments. While this may be a benefit for the client who can only afford to make small payments at a time, it may be a problem for businesses that may be on a budget strain. Since businesses need to make payments of their own, the slow flow of cash from their clients may make it harder for them to make their own payments.
This is where Accounts Receivable Factoring Companies enter the picture. Universal Funding Corporation is one such agency that provides invoice factoring services for small to medium sized businesses of all industries.
Accounts receivables is a term that some business owners may not be entirely familiar with. The term basically describes the amount owed to a company as printed and recorded on an invoice or receipt. This includes the amount a client is required to pay monthly, the amount already paid, and the number of payments remaining.
In a perfect world, every client would abide by their contract and make every payment on schedule. However, there are always clients who make payments late or fail to make them at all. This can financially hurt the business as missed payments mean loss revenue. This may make it harder for companies to pay their own employees, suppliers or the rent.
In order to combat such problems, some companies may elect to sell their accounts receivables to a third party agency. The accounts receivables is sold at a discount, which is how the third party company makes a profit. The seller, in return, receives full payment usually all at once. This means no longer having to wait for its clients to make their small incremental payments.
Universal Funding Corporation is one such agency that buys accounts receivables from small businesses. It makes the purchase at a much better rate than most other Factoring Invoice Companies. Of course, the rate will ultimately depend on multiple factors, such as whether the payer has missed any payments in the past, the amount of payment remaining and the client’s credit history.
Universal Funding Corporation serves a long list of high profile retailers, which includes Sears, Costco, Target, Chevron and Kroger. It has also served various other smaller businesses in the oil, printing, wholesale and transportation industry.
Selling their accounts receivables has enabled many businesses to make their payroll, pay their bills, stay current on taxes and hire new employees. This is also a good alternative for companies that may not qualify for a bank loan.
Some companies may have to wait 30, 60 or even up to 90 days before receiving a client’s next payment. Some businesses cannot afford to wait that long. By selling their accounts receivables, whether the whole invoice or just a portion of it, they no longer have to worry about budgeting strains. The benefit of receiving complete upfront payment has helped many businesses maintain a solid cash flow.
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