Customer Planning

Here is how important deciding who to & how to sell is when it comes to invoice factoring or any type of commercial financing for that matter. When accounts receivable is the collateral for borrowing, the transaction must be straight forward and easy for the factoring company to verify. If the customer does not have a fair to good public credit rating, there will be a problem. If the customer is located in the US, but bills out of their parent internationally, that creates a problem. The work needs to be formally accepted, meaning that it cannot be invoiced today for work that actually gets finished next week. Asking the factor for a credit rating before setting up terms with a new customer for factoring will help. Having customer engagement documents which spell out exactly what is transpiring will help as well. In this turbulent business climate getting business right trumps getting the gig.