More and more often entrepreneurs hear about factoring services and the number of companies that make use of the services is constantly growing. Awareness of the Polish business in this respect is growing from year to year. Nevertheless, there are many various types of factoring, and the niche ones are now familiar to the majority of companies. If an entrepreneur thinks about thorough restoration of its financial standing, it should analyse, among others, the methods of debt management in its company and may begin its restoration of its operation with such an action. In this case, restructuring factoring will be helpful – a multi-dimensional service to be used in several areas.
Apart from traditional factoring of non-payable receivables and other services, such as debt monitoring or taking-over the risk of insolvency, this type of factoring assumes also activities in the scope of payable receivables and liabilities. It may involve recovery of receivables either at the pre-litigation stage or following this stage, as well as hedging of these receivables.
Restructuring of company receivables through factoring also mean repayment of debts towards public and legal institutions, such as Social Insurance Institution or Tax Office, not only key suppliers. The factor shall be responsible to sign a settlement agreement with the said institutions or spreading the debt into instalments, if required. It will then be settled with the use of current receivables, reported by the customer to the factoring company. Engaging an external entity, such a as a factoring company, to deal with relationships between the creditor and the indebted company may favourably affect normalisation of their relationships. When a creditor sees good will and attempts to improve the situation, its has certain guarantee that the financial institution will be acting reliably according to the agreement. In turn, the enterprise that makes use of restructuring factoring service is able to improve its financial situation without a hurry, and operate in an undisturbed manner. However, the service requires knowledge of law, taxes, accounting, thus it will be advisable to find the factor who will be able to employ a group of experts with required competences.
Since the underlying sources of financial problems may involve many various aspects of company’s operation, so without a proper analysis to be performed by experts it is not advisable to make use of any ready services. In particular, in the period of worse economic situation, it is good to take care of optimally tailored solutions.
Published on: 14 November 2016