Following a long-term period of great cooperation, one of our permanent customers suddenly states that it will not be able to pay for its invoice on time. Does it sound familiar? In the face of progressing economic slowdown, Polish entrepreneurs face such situations more and more frequently. They are then faced with the dilemma – what to do? More than once, they do not do anything, since they do not want to deteriorate their relationships with the customer. They thing it is better not to undertake any radical steps and simply wait for the payment. Nevertheless, such actions expose their own financial liquidity to the risk, since they do not know how long they will have to wait for the payment and how many customers will behave the same way. However, the market offers services which can successfully prevent such problems, among them being maturity factoring.
Factoring is usually associated with the financing of invoices the maturity dates of which have not expired yet. Whereas, maturity factoring handles receivables that have already become overdue. What is important, such financing may cover a single contract or even a single invoice. This type of factoring ensures prompts payment towards invoices for the customer. Thanks to it, entrepreneurs have funds they can use for the smooth execution of subsequent orders.
Entrepreneurs should bear in mind that maturity factoring constitutes a protection for the company, and – moreover – supports the relationships between suppliers and customers. In the situation when a customer is not able to pay our invoice on due date, the factor assumed the liability to settle it. A customer may then pay with delay, and our company receives funds from the factor. Thanks to the maturity factoring service, enterprises get what they need in the situation – one company gets time, the other – money. Factoring thus reduces the risk of conflicts between entrepreneurs and ensures that petty shortcomings do not negatively affect partners’ relationships. Additionally, thanks to the Factor being present in the receivables settlement process, our customers feel more disciplined and there is real chance that they will be paid for our invoices on due dates in the future.
Published on: 14 November 2016