- 21 Jan
Are You Getting Bad Service From Your Factoring Company?
Factoring service levels are generally very good, as evidenced by our research finding that 98% of businesses using invoice finance, that we surveyed were, said that they would recommend their provider. That leaves the 2% that are not prepared to recommend their existing provider, which includes those receiving a bad service, or poor quality service levels from their existing factoring company. We found that when companies move invoice finance companies, in almost 9% of cases it is to improve service quality levels.
This is particularly important with factoring facilities, as the finance company is providing a credit control service, in addition to funding. If the credit control isn't being well handled, you could see a slow down in customer payments, leading to cash flow constraints and higher charges from the factoring company, who may charge refactoring fees, when debts get old (not an incentive for them to achieve the fastest debt turn for you!).
Bad Factoring Service
The answer, if you are getting a bad factoring service, is to transfer your factoring arrangement to a company that will provide a better quality service, there are plenty of those around, providing you know which to choose.
Help Changing Factoring Companies
There is plenty of help available to help you change factoring companies. It may seem like a daunting prospect, and some companies that are getting a poor service put off moving because they don't want the hassle. However, the factoring companies that do provide a first class service have processes in place to help you move easily, it's in their interests to get you moved to their service, as simply as possible. The measures include hand holding services, payment of any termination fees (these may need to be negotiated if you are not getting the service you were expecting), trial periods and standardised processed to enable customers to move easily between providers.
In addition to improving service levels, you may be able to improve on the costs that you are paying for your facility. Again, there are providers that are keen to attract business from other factors, and they will often offer improved rates in order to win customers from their competitors.
If you are receiving a bad factoring service, there are likely to be improvements available from alternative providers, so it may be time to search the market and see what else is available.