Finance accounts receivable helps companies by enabling them to finance any slow-paying invoices. Also known as factoring and invoice factoring, it is a banking solution that can help businesses that always seem to have problems with collecting due funds. With accounts receivable financing, businesses can get assurance that have sufficient funds to keep their operations afloat.
Below are some steps and tips to fully optimise finance accounts receivable for your business as shared by expert providers of cash management solutions:
Be prepared for the account setup process. A bank or financial institution will determine if your company can be granted this funding solution. They will check various aspects such as the credit quality of your customers or clients, status of your corporate taxes, and your background. If you are applying for a large funding facility, the bank or finance company will also review your company’s financial statements. As such, it is important that you be prepared for all these checks. Once all the checks or investigations are completed, contracts will be signed, the clients or customers will be notified, and the account will be put in place.
Make sure your receivables are ready. When the account is in place, you will then have to select the clients and receivables that will be funded. The list of your chosen clients’ or customers’ invoices will then be submitted to the receivables financing company, together with a schedule of accounts document. This schedule of accounts becomes your formal request for funding.
Below are some steps and tips to fully optimise finance accounts receivable for your business as shared by expert providers of cash management solutions:
Be prepared for the account setup process. A bank or financial institution will determine if your company can be granted this funding solution. They will check various aspects such as the credit quality of your customers or clients, status of your corporate taxes, and your background. If you are applying for a large funding facility, the bank or finance company will also review your company’s financial statements. As such, it is important that you be prepared for all these checks. Once all the checks or investigations are completed, contracts will be signed, the clients or customers will be notified, and the account will be put in place.
Make sure your receivables are ready. When the account is in place, you will then have to select the clients and receivables that will be funded. The list of your chosen clients’ or customers’ invoices will then be submitted to the receivables financing company, together with a schedule of accounts document. This schedule of accounts becomes your formal request for funding.
Wait for the accounts receivable to be verified. Once the bank or financing company receives the Wait for the accounts receivable to be verified. Once the bank or financing company receives the receivables, they verify them with the customer or client. This step is crucial for helping prevent issues in the funding process.
Receive the funds for the batch of receivables. After the verification process, the invoices will be ready for funding. The finance company or bank calculates the advance and deposits the amount in the client’s bank account. The advance pertains to the percentage of the invoice that is funded. It usually varies depending on the industry and other criteria but the general average is 80%. The advances are typically provided within a business day once the fund request is received by the financing company. The funds are sent to the client either by wire transfer or by direct deposit.
Get updates regarding payments and settlement. Lastly, find out if your customers or clients pay their invoices within schedule. Generally, as soon as the funds are received, the transactions are considered settled. Invoices are then marked as paid and the remaining 20% that was not initially advanced, minus a financing fee, will then be rebated.
Source:
http://www.business.hsbc.ae/en-gb/capability/payments provides more details about cash management solutions.
Receive the funds for the batch of receivables. After the verification process, the invoices will be ready for funding. The finance company or bank calculates the advance and deposits the amount in the client’s bank account. The advance pertains to the percentage of the invoice that is funded. It usually varies depending on the industry and other criteria but the general average is 80%. The advances are typically provided within a business day once the fund request is received by the financing company. The funds are sent to the client either by wire transfer or by direct deposit.
Get updates regarding payments and settlement. Lastly, find out if your customers or clients pay their invoices within schedule. Generally, as soon as the funds are received, the transactions are considered settled. Invoices are then marked as paid and the remaining 20% that was not initially advanced, minus a financing fee, will then be rebated.
Source:
http://www.business.hsbc.ae/en-gb/capability/payments provides more details about cash management solutions.
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