It’s important for business owners to have regularly updated bookkeeping. Beyond the necessity to have a proper roadmap of your company’s condition, knowing where you are at a given time helps to set the ongoing strategy to run the business. But for this particular post, the importance of financial reporting is absolutely necessary for setting up a receivables factoring relationship.
Even though a factoring company will base its decision to fund on the creditworthiness of the account debtor (your customer,) we still would like to see current financials to get some context. This should be easily attainable by accessing up to date bookkeeping.
Normally we would ask for a current Balance Sheet, Profit & Loss Statement and Accounts Receivable Aging report. The aging report is the most important to gauge who the customers are and how active their payments have been over time. The Balance Sheet will highlight your outstanding long term liabilities that might encumber your existing assets.
There are many reasons to have updated bookkeeping, so have the commitment and resources set aside to deal with this critical activity.

