Long gone are the days when a
customer was required to pay in full at the time of
purchase. Today a vast number of businesses offer the
option of credit as a payment alternative. Terms of the
credit vary, but often times a customer will receive a
net 30, net 60, or net 90 day offer. This means that the
individual is responsible to pay the balance within the
designated time period. An invoice is typically sent to
the customer stating this agreement. Many businesses
rely very heavily on the receipt of these invoice
payments. Without these payments normal operations would
become difficult and the very survival of the company
would be in doubt. However, even when these payments are
received there are a number of problems that companies
often encounter. These problems can be solved
through a method called receivables factoring, but not
surprisingly, this method comes with a price. However,
before we look at the solution let’s briefly examine a
couple of common problems associated with
invoicing.
Basic Problems Associated With
Invoicing
Delayed payments. Even if the
terms of the agreement are kept, this still means that
the business will not receive their money for an
extended period of time.
Processing. Invoicing payments
requires a processing infrastructure and trained
personnel.
Disclaimer: The information
provided in this site is not legal advice, but general
information on financial issues commonly encountered. We
shall not be liable for any errors in the content or for
any actions taken in reliance thereon. Please consult
your financial
advisor.
