Is it good business to let your customers know that you are utilizing invoice factoring to extract the working capital from your accounts receivables, and that they should pay the invoice to your factoring firm? We 100% believe it is.
Some business owners are concerned about letting their customers know that they have factored their accounts receivables. These owners may feel that, “If my customers find out that I’m factoring my receivables, they might think that my company is having financial problems.”
In our experience, this turns out not to be the case. First, customers with strong accounts payable departments understand that their vendors will be factoring their invoices. That’s especially true in industries where factoring has been traditional for many years. These customers understand that invoice factoring provides cash flow for working capital needs.
Indeed, when done properly, notification invoice factoring enables your factoring provider to become part of your team – your partner – in working with and servicing your customers.
Total Accounts Receivable (AR) Management
At Paragon Financial, we have a long tradition of working well with our clients’ customers. We provide a full range of services to our clients that we call the Paragon Total AR Program. That includes managing the credit protection, collections and cash advances for clients receiving payment to us on their behalf from many of the largest and most well-run companies such as Wal-Mart, Comcast, Neiman-Marcus, Time-Warner, and AT&T, to name just a few.
In providing this full service AR management, Paragon stands out as a superior service provider. For example, fewer than 20% of invoice factoring firms utilize credit insurance. That’s because such insurance is expensive and many factors do not meet the stringent requirements of the credit insurance providers. Even more important, as an entrepreneurial firm like our clients, we understand that credit protection and safety will result in the best likelihood of long-term survival and growth.
Throughout our 20-year history, Paragon has been able to develop strong relationships with our clients’ customers – indeed, to have helped strengthen the underlying relationships between our client and their customers. Paragon’s famous “soft touch” with account debtors (our client’s customers) is known throughout multiple industries.
We deal with you and your clients in a courteous and professional manner. Paragon Financial is famous for its soft touch with ‘account debtors’. We verify that the invoices are in your client’s accounts payable system with the proper documentation, so that they will be paid in a timely manner. In fact, most of our clients find that, in addition to the main benefits of increased cash flow and credit protection, their customers tend to pay faster because billing and entry errors are reduced.
Furthermore, we do not act as a collection agency that hounds companies for bad debts. We manage, protect and advance only against solid invoices from reputable and creditworthy companies. It’s as simple as this: If we do not make your customers happy, we do not get to manage your accounts receivable the next time.
Notification factoring can add a positive component to your relationship with your customers. A highly reputable factoring firm can offer benefits to both you and your customers. When your factoring firm does its job efficiently and with respect for your customers, notification can strengthen your relationship with them. Working with such a factoring firm, you will benefit from that stronger relationship.