Invoice factoring offers an excellent opportunity to improve your funding situation. However, there are misconceptions about the process that prevent many staffing firms from reaching out. Specifically, companies worry that factoring will change their relationship with their clients and negatively impact their client experience.
Through invoice factoring, you get upfront cash for your unpaid invoices. A factoring company sends you the money, allowing you to get paid immediately for funds you might otherwise need to wait for.
The process can offer a superb method for smoothing out cash flow and getting the resources you need for various operations. But how do clients experience the change? Does the factoring company come between you and your customers?
The short answer to both these questions is “no.” Using a factoring company only means a small logistical change for your clients — they basically have a new place to send their payments. Meanwhile, other aspects of the factoring process make it a winning proposition for both you and your clients.
Because you have the resources you need when you need them, you can provide better services. At the same time, you have the cash you need to weather emergencies and to expand your offerings as needed. As a result, your operations can offer optimal value to your customers.
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Here are a few of the details of how factoring operates in relation to your existing clients and client experience:
Your Working Relationship Remains the Same
Factoring doesn’t impact the day-to-day relationship you have with your clients. You still provide the same great staffing service that they’ve always received. Meanwhile, their communications with you remain the same — the funding company doesn’t step between you and your customers on an operational front.
Flexible Funding Will Improve Your Offerings
You turned to factoring as a way to increase your financial flexibility. This bolsters your operation and reduces your risks. At the same time, it provides a follow-on benefit to your customers.
Improve Your Relations with Clients
Invoice factoring removes some of the risks of doing business. You can receive cash, even when a client is late with a payment. Most of these slow payers will eventually remit the full amount, even if it takes them extra time.
The factoring process gives you the confidence to remain on good terms with these customers. You don’t need to resort to aggressive collection tactics to grab fast cash at the expense of a profitable long-term relationship. Since your cash flow isn’t endangered by a little extra time, you can maintain a healthy bond, even when remittance takes longer than you predicted.
Factoring Only Impacts Payment Details
For the most part, invoice factoring only changes where a customer sends their money. Meanwhile, this detail is usually considered a minor logistical matter.
Imagine that you once had clients send checks to your office address. Now you want them to mail them to a PO box. Would this change your overarching relationship with the company? Of course not.
Or think about what would happen if you changed banks. Customers once wired money to a particular account, but now you need them to alter those remittance details. Or consider if you switched credit-card processors. Would any of these minor alternations carry a long-term impact? Almost certainly not.
Talking to Your Clients
Invoice factoring offers an excellent addition to your funding toolbox. The key is to remain in close contact with your clients about the process. Communicate with their accounts payable department to make sure the details are in place.
Otherwise, the core of your relationship will remain the same. Invoice factoring only tweaks a largely insignificant detail in your overall connection to your customers. At the same time, you’ve enhanced your financial security and increased your ability to provide great staffing service.
Ready to Improve Client Experience at Your Staffing Firm?
Ready to get started? The right financing partner can give you the flexibility you need to succeed. Frontline Funding can give you the support you need to take your staffing firm to the next level.
Contact Frontline Funding today to learn more.