Archive for July 2018

Discover the Right Deals for the Company Now

Factoring represents a financial service system focused primarily on solving the working capital needs of the company, recovering its accounts receivable in advance, receiving the following advantages:

Financial

  • Liquidity

It offers a safe, reliable and continuous source of resources.

  • Financial situation

It allows the company to grow, using its own resources, causing a healthier financial situation in the company by improving asset turnover.

  • Flow leveler

When there are seasonal sales, extraordinary or occasional expenses, as well as take advantage of existing opportunities with suppliers.

  • Reciprocity

It does not require deposits or investments for reciprocity. It does not immobilize assets.

  • Monetary position

It promotes the best use of monetary assets, without generating liabilities or indebtedness, and there may be some fiscal benefit.

  • Revolvency

A factoring line is totally revolving, so it allows the company to obtain resources at any time.

  • Increase the ability to negotiate with suppliers.

Administrative

  • Credit and collections

The non-productive tasks of credit, administration and collection management to the factoring professionals, minimizes costs and avoids loss of time.

  • Eliminates controls

The factoring keeps the company informed about its customers and particular collection situations.

  • Opening new markets

Due to the close relationship that exists with the main buyers, the possibility of recommending new markets arises.

  • Productivity

Efficient the operating cycle of the company, since it does not require waiting until the collection date for a new purchase of raw materials.For the factoring invoices this is important.

  • Improves the relationship between customers. It benefits your image by delegating collections to professionals with large commercial relationships.

Disadvantages

  • High cost, specifically the interest rate applied is higher than the conventional commercial discount.
  • The factor may not accept some documents from your client or request for the operation the option with recourse.
  • Operations related to perishable and long-term products are excluded.
  • The client is subject to the criterion of the factor society to evaluate the risk of the different buyers.

Obligations of the factor company and the company

The factor company can reject operations that do not offer normal market guarantees. Regarding the other operations, its obligations are:

  • Collect debts.
  • Respect the expiration dates of the invoices to proceed with the collection.
  • Assume the risk of insolvency (depending on the case)

The obligations of the company are:

  • Give all the credits that originate their sales.
  • Notify your client of the signing of the contract with the factor company.
  • Facilitate the company factor report on: Sales, financial situation, accounting. Also the payments received directly from the clientele, obliging to transfer the funds thus obtained.
  • Giving back to the factor society the services rendered.
  • Do not intervene in collection management unless the factor company requests it.
  • Respond to the breach of the contracted obligations with its customers.

Great Perfections for the Truckers

Returns are an integral part of the business, but you must make sure that you do not limit them to the cost of the goods. A well-established process of reverse logistics will bring you a large income as a result. You will be able to better manage and re-integrate the returned materials, which will ensure you have a well-organized process, reducing waste and constant income from your products.

Do not let your goods grow old in cars of technical experts. Your products must be serviced as soon as possible, repaired and returned to stock. Our advanced technology and electronic returnable invoices will increase the transparency of your supply chain and will ensure that the returned items arrive at the destinations. The load boards for truckers edge are there now.

Make it easy for your customers to return and repair

End users appreciate companies that work for their benefit, and the introduction of an uninterrupted return system will bring them benefits and improve your performance. Reverse logistics can make the refund process easier for your customers and help you quickly replace products or reimburse the cost of their purchases. Our extensive after sales service portfolio can also help you reduce downtime in connection with the repair of your customers’ products.

Reliable work and quick response increase customer loyalty, which is the key to the successful development of your business.

The management of returns should not be complicated

Take on the possible responsibility and make it your competitive advantage, thanks to the safe and reliable management of returns. Backward logistics processes can increase your efficiency, keep customers and stimulate the growth of your business.

Practice shows: in an ordinary commodity warehouse or at a wholesale base, the costs of picking operations can be up to two thirds of all operational costs of the enterprise, both financial and temporary. These figures should be known and considered in the work of any person making decisions that affect the process of commodity circulation, be it the company manager, a logistics specialist or a freight forwarder. Therefore, it is not surprising that companies seeking to increase productivity, very often begin with the modernization of this sphere.

Many companies, faced with the need to improve profitability, often immediately begin with the introduction of expensive new technologies or equipment complexes. These measures by no means always give the desired result, and the funds invested in them do not pay off. Sometimes very simple organizational transformations make it possible to achieve improvements faster, with less cost and with greater effect than large investments in new technologies.

Essential Opportunities for Developing the Business

When deciding on financial issues, there are many self-employed and SMEs who show interest in two tools that can be of help. It deals with non-recourse factoring and with recourse, both short-term financing instruments that allow those interested to collect invoices in advance, avoiding the risk of insolvency on the part of their suppliers or customers.

In order to opt for one or another modality, it is convenient to take into account the service provided by each one of them. Knowing the policy of action of these financial tools can, in case of identifying specific needs in the treasury of the activity, optimize the requests made to the bank. For the Accounts receivable management services from Century Finance you will be able to have the best options.

The Small Words

In a very summarized way it is specified that factoring -without specifying in its modalities of with or without recourse, or international factoring-, is a financial tool that allows companies and freelancers to collect their invoices in advance to obtain alternative financing or obtain liquidity to cover possible expenses or to pay the payment of materials or services that are necessary to continue with their activity – it must be made clear that it has nothing to do with the ‘ confirming ‘ and that it is not bank loans. The agents that take part in a factoring process are:

Assignor: term used to designate the company or self-employed person who uses the factoring service.

Debtor: name assigned to the companies or self-employed who have to pay the invoice to the assignor.

Factor: bank, savings account or Financial Credit Establishment (EFC) that provides the factoring services to the transferor and, later, will collect the corresponding money directly from the transferor when it collects -factoring without notification- or through the debtor -factoring with notification -.

Since the financial institution that anticipates the money to the cedants assumes a significant risk of default, the payment made to these companies or freelancers is penalized with a commission that can amount to up to 3% of the assigned credit.

Once the concept of factoring has become clear, let’s see what the differences between non-recourse factoring and recourse factoring are. Depending on the agreement reached between the transferor and the factor, we will be in either case.

What is factoring with recourse

This type of factoring considers the assignor liable in case the debtor does not pay the invoice. Let’s give a practical example to understand it better.

Raquel, a businesswoman dedicated to the upholstery of armchairs, needs to buy fabrics worth 5,000 euros from one of her suppliers to deal with a last-minute request. Their funds are not so high as to be able to manage this payment, since they have not yet charged a bill of 6,000 euros that they issued to a hotel that needed their services because they were remodeling their furniture.