By factoring their accounts receivable, staffing agencies can meet their own needs and provide exceptional services to their clients. Invoice factoring frees up cash waiting in these business’ stack of unpaid invoices and removes the stress of making payroll. However, staffing agencies are known for experiencing long gaps between when they invoice their customers and when they receive payment this can make it difficult to pay their workers consistently. These agencies must also recruit top talent to be successful. Staffing agencies need to pay their employees, their biggest resource, regularly. How does the Staffing Industry use Invoice Factoring? Many small to medium-sized trucking companies also use factoring to build up a fleet of trucks, attract quality drivers and grow their workforce. Rather than holding onto outstanding freight bills, invoice factoring provides the quick capital trucking companies need to transport the next load. From time to time, the business will also need extra cash to purchase new equipment, reimburse suppliers and cover vehicle maintenance. The transportation industry and trucking businesses have a long list of expenditures that must be paid prior to any freight actually being delivered: buying fuel, paying drivers, covering tolls and insurance, etc. How does the Transportation Industry use Invoice Factoring? Thus, invoice factoring has become a highly sought-after solution for oil and gas companies that need to cover day-to-day costs, manage slow-paying customers, and free up cash for opportunities. Quick access to working capital ensures these businesses have the flexibility they need to take on new jobs and orders and keep up with rapid growth. Maintaining sufficient cash flow is a must for paying the bills on time, investing in additional equipment, hiring top talent and growing a business in a booming industry. The explosive growth of the Permian Basin has created both incredible opportunities and big challenges for oil and gas companies, both of which require cash. The following list includes six industries where factoring is an increasingly popular funding method, along with a look at how they benefit from factoring services: How Does the Oil and Gas Industry use Invoice Factoring? Whether you need to improve cash flow to keep up with bills and payroll or to help your business expand, factoring is an affordable and fast financial solution. Industries that Commonly Utilize Invoice Factoring One of the biggest benefits, the business avoids taking on any new debt because it is simply being given money it has already earned and is waiting to be paid. The factoring company then quickly advances the funds needed against the unpaid accounts receivable (in as little as 24 hours). Essentially, the business is selling its accounts receivable to a factoring company at a discount. Invoice factoring allows a business to use its outstanding invoices to generate immediate capital. For example, a business experiencing cash flow problems could lose a new customer that wishes to place a large order or multiple orders the business simply does not have the money to pay workers and purchase the supplies necessary to fulfill the new order. This situation also hinders a business’ flexibility to pursue new opportunities. When a business has to wait 30, 60, or even 90 days for its customers to pay for completed work, it can put a serious strain on a business owner’s ability to meet financial obligations. But what is invoice factoring, and how does it work? Thanks to technological breakthroughs, invoice factoring companies have been able to go a step further and target the needs of specific industries, making this cash solution more accessible than ever before. From medieval businessmen to the modern services used today, factoring has provided countless businesses with the funds they need to succeed. Invoice factoring has been around for centuries, going back 4,000 years to Mesopotamia.
1 Comment
2/8/2023 11:13:26 pm
Thanks for sharing this wonderful information! So long, spreadsheets. Thanks to AI tech, ANNA scans your receipt, stores the details and assigns an expense category, without you having to type a thing.
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