What is Factoring anyway?
Factoring is a financial transaction and a type of finance in which a business sells its accounts receivables to a third party (called a factor) at a discount. A business will sometimes factor its receivable assets to meet its present and immediate cash flow needs.
Factoring is commonly referred to as accounts receivables factoring, invoice factoring, and, occasionally, accounts receivables financing.
When a company decides to factor accounts receivables invoices to a factor the company needs to understand the risk and rewards involved with factoring. Major industries who use factoring include Distribution, Retail, Manufacturing, Transportation, Services, Construction and Real Estate.
As a normal course of business, Director Resources does not encourage factoring. However, factoring is a viable means to address immediate cash flow needs and we would not feel we were providing a full cash flow management service if we did not include factoring as part of the discussion.
Why doesn’t Director Resources encourage factoring?
We believe we provide excellent cash flow management alternatives that Funeral Professionals can embrace at no cost. Factoring can be complex and costly. We do stand prepared to consult with our Funeral Professional clients should they wish to explore factoring as an option for their cash flow needs.