Defining the invoice factoring companies: Simply the Must

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The uniform code of commerce defines the sale to the credit as the transfer of the patrimonial right on goods or services, of the seller to the buyer for a certain price, with deferment of the collection. Sales to the original credit to the seller problems of various kinds that can be classified as:

Administrative: It is necessary to search for information on creditworthiness of buyers, permanent knowledge of the amount of the credits and procedures related to the collection of the same.

  • Because of the possibility of insolvency.

In many cases, it is necessary to recover the amount of credit sales before maturity.Credit sales, which result in accounts receivable, usually include credit conditions that stipulate their payment in a certain number of days. Although all accounts receivable are not collected within the credit period, most of them are converted into cash in a period much less than one year, consequently, they are considered Current Assets of the company, therefore a lot of attention to your efficient administration. With the invoice factoring companies the deals are now perfect.

The credit policy in brand company guidelines to determine if credit should be granted to a client and the amount of it. The company must not only deal with the credit standards it establishes but also with the correct use of these standards when making credit decisions. Appropriate information sources should be developed and methods of analysis credit. Each aspect of this policy is important for the successful administration of accounts receivable. It is necessary to remember the definition of accounts receivable.

Accounts receivable include the amount of the sale of goods or services in exchange of a verbal or implicit promise to receive cash in the future. It also defines it as the right in open account against a client’s cash.

Experts define accounts receivable as the second most liquid form of entry in the company’s assets. They are created as a result of credit sales and is one of the largest items in the Asset.

Accounts receivable are a problem for many entrepreneurs today. The fact is that the collection cycles have lengthened, which entails temporary difficulties in the company’s finances, so the inability to collect outstanding accounts becomes one of the main causes of bankruptcy. Therefore, smart credit management in a quick and timely manner is crucial in the world of business, and essential for competitiveness and growth.

The growth of a company depends largely on its liquidity. Many sales and credit expansion projects are truncated due to lack of cash immediately. Today, companies are exporting more and more and risksinsolvency of its customers as well as affecting the margin of the company, weakening its results and constitutes a permanent threat to achieve financial equilibrium, so it is necessary to search for different financing variants among which we find factoring.