Factoring Insurance: A Key Part Of Supplier Relations
If you're a buyer, you know that sometimes you need to extend your payment terms, especially in today's uncertain economic climate. Doing so isn't always a great choice for supplier relations. When you choose reverse factoring, you're developing a solution that helps everyone involved. This doesn't just go a long way for helping you to have great relationships with your suppliers - it can also make other businesses happy to work with you based on the great reviews of your business traveling through your supplier network.
Here's how reverse factoring works:
First, you receive the invoice from your supplier. After you approve the invoice(s), you'll send them to your reverse factoring third party. The supplier can check to see that the invoice has been received by the third party company, and they'll be able to see the date when funds will mature. The supplier has the option to sell the invoice, and in return, receive an early payment from the third party.
If a supplier chooses to cash in early, they'll receive nearly 100% of the invoice cost, less a finance fee that goes to the third party. The supplier usually receives the funds within a single business day. If the supplier prefers to wait until the funds reach maturity, they can do so with no financing fee.
If you're the supplier looking to create solutions for your buyers, you may be interested in factoring insurance. This ensures that you'll eventually receive full payment as you go through the factoring process. This means not only that you can rest assured that you'll get full payment for your invoice, but also that you're creating workable solutions for your customers in today's tough economic climate. If you decide to go through with factoring, you'll want to be sure to purchase a factoring insurance policy. This protects your business as you're waiting for payment, and ensures that you'll get paid if something goes wrong during the factoring process.
If you're interested in reverse factoring, or you need factoring insurance, Prudence Insurance Brokers LLC has you covered. We're here to work with you to help you discover the long-term business insurance solutions that will keep your business protected while also allowing you to experience exponential growth.