Have You Looked at Accounts Receivable Financing to Improve Your Cash Flow?

By Keyfactors - May 27 2022

Have you ever noticed how some businesses always seem to be financially well off while others struggle? It’s not always because of better cash flow. In many instances, it has to do with the various services that businesses use in order to ensure that they have the necessary funds in place.

Many businesses throughout Australia are using accounts receivable financing, often referred to as invoice financing or invoice discounting. At Key Factors, we’re here to tell you more about this practice so that you can take charge of your cash flow once and for all.

What Is Accounts Receivable Financing?

Accounts receivable financing is an opportunity to clear out the invoices that you have been waiting on for payment and dramatically improve your cash flow. Whether you have just submitted the invoices to your clients or they have been in collections for months, you have the opportunity to be paid on them almost immediately.

By financing your accounts receivables, you have the ability to take a percentage of what is actually owed on them. The payment is given to you immediately as opposed to waiting until your clients actually decide to make payment.

There are a number of reasons why businesses choose to use this practice. For many, it is to get the cash flow needed. For others, it is to take the time to establish better payment terms for the clients that they work with. Either way, you can avoid waiting any longer for invoices to be paid while your operations suffer because of not having a sufficient cash flow to cover payroll and your day-to-day expenses.

The terms of the accounts receivable financing can vary based on your business credit score and the overall value of your outstanding accounts receivable department. You will be able to apply for an account. Once approved, you can choose to finance as much or as little as your accounts receivables as you wish. Some companies choose to finance all of it while others only want to finance the older invoices that may be past net 30. Either way, it can offer you immediate cash flow so that you can begin paying your bills and taking care of running your business more effectively.

How Does Accounts Receivable Financing Work?

Accounts receivable financing can be an ongoing practice to ensure that you don’t have to wait a full net 30 or net 60 in order to receive payment. Instead, you can choose to invoice your clients for the goods or services that you provide to them. A copy of the invoice is, then, sent to us at Key Factors. We’ll make up to 80 percent of the invoice’s face value available to you in approximately four hours. By taking a discounted rate, you can maintain a stronger amount of cash flow within your operations.

Further, the remaining 20 percent of the invoice’s face value is provided to you once the customer has paid, minus any accrued charges.

variety of industries are able to take advantage of accounts receivable financing. This includes:

  • Recruitment
  • Labor hire
  • Manufacturing and wholesale
  • IT and business services
  • Transportation
  • Earthmoving and mining

The steps to get started are simple enough. You can choose to speak to a cash flow manager or enquire online with some of your contact information. Once you have been approved, you will have the opportunity to be paid on outstanding invoices.

Advantages of Accounts Receivable Financing

You will find that there are a number of benefits involved with accounts receivable financing. You can get a fast, 48-hour approval so that you can begin getting paid for all of the outstanding invoices in your system. Additionally, you can see an improvement in your cash flow almost immediately with the ability to get funds deposited into your accounts in as quickly as four hours.

You won’t have to worry about minimum usage or ongoing monthly or annual charges. There’s no lock-in or long-term contracts, either, ensuring that you can choose to take over your accounts receivables department once again at any time that you desire.

This may be the fast and flexible business funding that you have been searching for.

Too many companies suffer from cash flow. When this happens, they take longer to pay their invoices. This can start to affect you dramatically as you wait week after week for clients to pay for the invoices that you have sent them. Rather than wasting valuable time within your operations calling to find out when payment is, you can use accounts receivable finance to get paid on up to 80 percent of the invoice, minus a discounted rate, straight away.

When your cash flow improves, you can pay your own outstanding invoices. It can also provide you with the funds that you need to cover payroll, invest in new equipment, market your business, and even take your business to the next level with new opportunities and locations.

The Key Benefits of Key Factors’ Accounts Receivable Finance

At Key Factors, we’re here to offer you a solution to your accounting problems. We make it easy for you to get fast funds (often within 24 hours) and not have to worry about quarterly audits or property security.

There’s no minimum usage and you aren’t locked into any kind of long-term contract. You can choose to stop financing your accounts receivable at any time.

In the meantime, we’ll ensure that you’re getting competitive rates. This ensures that you can keep a significant percentage of your invoices – 80 percent upfront and 20 percent once the client has paid, minus discount fees. Additionally, there are no ongoing monthly or annual charges, helping you to maintain a positive cash flow throughout the year.

The finances of your business shouldn’t have to suffer simply because your clients haven’t paid. We have a solution that allows you to take control of your finances.

When you want to discover the benefits of accounts receivable financing for your own business, contact us at Key Factors today.


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