This comes up less often than in the past, concern about the perception of receivable factoring by business owners. They sense just using factoring will somehow have a negative reflection on their company. This is a perception issue which is not always based on reality. It becomes real when a business is clawing for their last breath of existence, but these days it’s rare that a factoring company would consider this kind of client.
But the perception that a customer will “think” the company is trouble can be dealt with easily if the business owner is straight forward about what they are looking to accomplish.
When an account debtor (customer) receives notice that a vendor is using invoice factoring they might be concerned depending on how the introduction is made. If the introduction is done properly, the customer should realize the future success of the vendor, depends on securing financial backing to enable steady growth without loss of consistency, responsibility and warranty. Once invoice factoring has settled into the daily operations of a company, very little changes from the customers’ viewpoint.
A smooth transition into a seamless process is the critical key to satisfactory implementation.
Letting the customer know about the financial relationship used to provide working capital allows them to become acquainted to the process. Because invoice factoring requires customer contact to verify the invoice, when they know this is a normal operating procedure, then it becomes easy to manage.
From the factoring company’s perspective, it’s paramount that the customer remains satisfied with our client in every way so as to not upset the carefully crafted relationship. Any disruption or complication is bad for business all the way around. So think of this as a customer relations challenge not a financing stumbling block.