If you have decided to tie-up with a freight factoring company, to improve your cash flow and also to handle your receivables, then it is important that you conduct a thorough survey of all the freight factoring companies in the market before zeroing in on the ideal company.
Since a freight factoring company will not just be a passive moneylender, but rather be an extension of your business, it is imperative that you locate the best on, since the company’s actions will reflect on your business. A freight factoring company will buy your credit invoices and pay you the invoice amount minus their factoring fee. They might also arrange to collect the invoice amount from your clients on the due date. Thus, it is essential that your freight factoring company act as a solid bridge between you and your customers, in particular on the delicate matter concerning payments. Here are some qualities that an ideal freight factoring company should positively possess, in case they need your business.
The Company Should Have The Relevant Experience: The freight factoring company should be experienced enough to handle your business. They should have successfully treated similar clients in the past. They should have the proper knowledge and staff to handle slow paying customers without raising the tempers of your customers. You should talk to some of the factoring company’s existing clients to get a feedback of their range and quality of services before you make a choice.
The Company Should Have Cool And Gracious Staff: The factoring company should have calm and courteous staff, who know how to handle credit clients and do not lose their cool, when some clients delay payments. They should have the necessary tact and skill to extract payments from your clients on the due date. They should have the latest data at their fingertips before they start calling or faxing your clients for payments.
The Company Should Have The Necessary Funds: The factoring company should have the required funds to pay you as soon as you present your invoices to them. Any delay on their part will adversely impact your cash flow and in short, negate the very purpose of appointing a freight factoring company.
The Company Should Present Presentable Terms: The factoring fee of the factoring company should be reasonable. They should not insist on a long or short-term contract since it will prevent you from exiting the contract, if you are not happy with the arrangement. If possible, locate a company that does not retain an additional amount as security, since this will only lock up your money.
The Company Should Delegate Specific Staff For Your Account: Once you do a tie-up with a freight factoring company, the company should delegate one or two staff members, specifically for your account. They should be responsible for monitoring your clients and should be answerable to you, whenever you need information or feedback. In case they have any trouble in handling particular clients, then they should inform you immediately so that you can take immediate steps to defuse the situation, before it goes out of hand. The staff should not be mechanical in their words and action, but instead, should interact with your clients and build up their trust and confidence.
You should tie-up with a freight factoring company, only if it possesses all the above qualities since any weakness on their part will be reflected in straining your relations with your clients and affect your business in the long run.