How to Convince Your Board of Directors That Factoring Your Invoices Is Good for Your Business
When you fully understand why your accounts receivables should be offered to freight bill factoring companies to rapidly improve your cash flow, you may be confronted by members of your Board of Directors who do not understand the process and will wonder why you have suggested this solution.
Factoring Does Not Increase Your Debt
Your directors may be concerned that your debts may be increased by hiring freight bill factoring companies. You will be able to explain that invoices you have issued, where work has been completed, will be paid in full by the factoring company, less their fee. No additional debt will be incurred.
This rapidly increases your cash flow as you may be paid within 24 to 48 hours after you have issued an invoice. This relieves you from waiting for 30, 60 or even 90 days.
You Can Choose Which Invoices to Factor
You can inform the board that you can pick and choose which invoices you select to factor, while others will remain under your standard control. In this way, you may choose to factor invoices which are likely to be paid a long time into the future, and continue to collect payment for invoices where companies always pay you within 7 to 14 days.
How Busy Is Your Freight Business?
Where the success of your freight business is relatively seasonal, you may choose to send some of your accounts receivables to freight bill factoring companies to relieve your cash flow at certain times of the year and then not use their services for the rest of the year.
This puts you in control of your cash flow and does not mean that the factoring company will be managing your business and telling you how to operate.