Accounts Receivable Finance also known as Factoring, is one of the world’s oldest and most reliable forms of Commercial Finance. Whether the economy is good or bad, factoring remains reliable but continues to evolve with the ever changing market place.
The earliest description of Accounts Receivable Financing was created by Hammurabi in order to promote trade within his region. The practice was then adapted by the Romans when landlords would finance and collect on the debts owed to their tenants. As it spread through Europe it evolved into a common way for merchants to finance orders shipping around the world. During this time the factoring companies would even let the merchants and manufacturers know about the upcoming trends.
When Accounts Receivable Factoring came to America was predominately for large textile and manufacturing businesses. The sales people for these industries would office with the factoring company in order to confirm the factorability of each order placed. With the technological advancements in communication, officing together was no longer necessary; however having an office close to the factoring company was still a preferred method in order to expedite the receipt of invoices and issuing live checks.
As technology evolved, billing evolved through overnight mail, faxes, and then email, and the need to limit the businesses’ options to location changed making the factoring industry more competitive, improving the level of service and reducing the cost of factoring. Historically businesses found their Accounts Receivable Factoring company was through the phone book, web search or a referral source that generally had a preferred status with a few Factoring Companies limiting the options of the business to those connections.
Although this way has worked for decades but with the advancement of technology there is now an easier way.
National Factoring Group allows businesses to compare the Factoring Companies that work within the criteria the business sets, either closest to them, with a national presence, or specializing in their industry. But it goes into much more detail than that, you now get to compare the factoring companies’ collateral position, invoicing requirements, service ratings, acceptable terms, credit limits offered, and much more. Businesses are no longer limited in finding a factor, but have the ability to compare their factoring options all on one page and make the decision confidently without compromise.