- 01 Feb
Why Are The Credit Control Benefits of Debtor Factoring Overlooked?
I have been looking around the blogosphere and have been surprised at the number of times that industry commentators focus only on the finance related benefits of debtor factoring without considering and mentioning the benefit of having a credit control service included in the price.
An integral part of debtor factoring is that the factoring company takes on the task of collecting the outstanding sales invoices of the business. This involves, sending out statements, chasing letters and making chasing calls to debtors, on behalf of the client company, regarding outstanding invoices. In many cases a factoring company can achieve a better debt turn that their client is able to achieve on their own as the factor's credit controllers tend to be more experienced professionals and debtors often feel more complelled to pay up when a major finance company is involved with the collection of outstanding invoices.
The benefit that is often overlooked is that a credit control service is included in the cost of debtor factoring and using this service can mean that the client doesn't need to employ their own credit controllers. This can enable them to make a huge cost saving and should be a key consideration when a business is assessing the costs associated with debtor factoring.