Factoring has been practiced for centuries. Romans tickets sold at a discount from the Phoenicians. The word "factor" comes from Latin, the language of Rome. That means "do" or The Travels of the pilgrims in the United States were funded by advances in a factor that has provided the funds to pay for travel "to do". Pilgrims returned the money, earning Factoring America so far. is a very common business practice in Europe, the U.S. have never heard of business.
Factoring is a sale of accounts receivable in cash rather than wait 30 to 60 or 90 days to be paid by the customer. When a company is provided with copies of invoice factoring, the factoring company uses bills to make a loan for your business. It's a simple process and can be automated after the initial operation. Credit is not a problem when loans or accounts receivable financing. Financial companies look at credit history of the seller is not yours! It is exceptionally good for small to medium, which have been in business less than two years.
My first experience with Factoring came when one of my clients year that ends with a significant tax liability for one year. He led a small transport company and had very few problems passing the tax. However, due to a sudden explosion of growth, the company made 2-3 times in the last half of the year. Because sufficient punishment has been imposed, fiscal responsibility has really hit hard. It was, in fact, has serious liquidity problems due to unplanned growth!
We talked about the situation, your taxes have been completed and had hired a couple of trucks to cope with the workload I had the opportunity to use the cost of renting a raft. But not yet self-employment tax, and no doubt it was an increase in business revenue.
I said nothing, but I was worried about the payment of tax preparation. I knew I had problems with cash flow and tax bill has not helped. Then said bills of $ 30,000. Because the bills are paid, and are not included in income for this year, so I had no idea had bills to that amount. In fact, the Bills, who blew on his desk.
I went online and started looking "invoices". I never really understood Factoring before that date, but I heard it. We have no bills factor of my client, because he called the company, worked, explained the situation and paid 50% of the invoice immediately and the rest soon after.
We have already studied "factoring" or accounts receivable financing and taxes as a person who was always looking for ways to help my clients to pay their taxes as soon as possible, especially if they were taxes on employees.
I put an ad online and in a few days called CPA. I had a client who imported culinary products abroad. Need a bill very important factor. I called one of the factoring company explained the situation. Factoring Company arranged for his company to place an order with a foreign supplier. Once the order was in place, we got the bill. The client received more than 90% of the bill in a few days. He repeated the operation three or four times!
Funding is a little more difficult to obtain, and accounts receivable financing, however, funding of command is very useful for companies that have made large purchases and resells to a third party.