Time is money. Today, when all transactions are virtually settled through trade credits, this truth gains new dimension. Payment date becomes a bargaining issue.
A conclusion is simple – the one who is willing to pay faster receives a better price. And the one that is able to wait for money longer wins more customers.
Summing up former articles, it may be achieved as follows:
- A company may offer better terms of transaction for its suppliers with the use of reverse factoring: this way it may not only satisfy claims of its key supplies, but is also able to negotiate discounts;
- A company may offer attractive terms of a trade credit for its customers thanks to factoring service: it will win customer more easily, since it will be able to offer them convenient terms of payment – it will get the money from its factor immediately;
- A company cooperates with good customers chosen following business intelligence: an assessment of the solvency of company’s customers constitutes the basis for factoring services and debt collection provision. Factors and debt collection companies also offer access to business information so as to make it possible for an entrepreneur to avoid cooperation with unreliable counterparties;
- A company is secured through debt collection services: finally, a company is ready for every possibility, since it may quickly undertake actions aiming to recover its money. This way, it settles its own liabilities and may expect more from its counterparties as a diligent customer and payer.
Summing up, complex care about financial liquidity does not mean only security of the company. A pragmatic company knows that apart from the quality and good price, promptness and predictability are also important. These features are particularly appreciated since they are less and less common due to the crisis.
Published on: 14 November 2016