GRADED DISCUSSION WEEK 8 Many firms offer factoring services whereby firms can l
ID: 2482743 • Letter: G
Question
GRADED DISCUSSION WEEK 8 Many firms offer factoring services whereby firms can liquefy their accounts receivable, essentially selling them for cash. TO DO Point your browser to http://www.winfin.com, the home page of Winston Financial Group, Inc. Your assignment is to explore this Web site and to answer the question: How does the process of factoring work? You are expected to make your own contribution in a main topic as well as respond with value added comments to at least two of your classmates as well as to your instructor.
Explanation / Answer
How Factoring Works taken from Winston Financial Group Web site:
How Factoring Works from my own Words:
Money fuels business: When cash flow stalls, it compromises our ability to run our company. How many times have we put aside bills, lost sleep over payroll, or couldn’t pay suppliers when they asked for payment? There is a time during each month, for all growing businesses, when outstanding receivables are keeping you grounded. If only we could get paid today on work we completed, our business would take off.
Serves as our cash flow engine: The process is called “factoring”, and in the simplest terms, it means the factoring company advances you up to 92% of the invoice amount immediately, and gives the remaining balance when our clients settle in full. Invoices can be submitted for factoring directly upon completion of work or product delivery. Revenue flows directly and instantly to us. No delays. No collection hassles.
Improve Cash Flow without additional debt: Factoring is not a loan, so you’re not incurring any debt. The Factoring Company actually purchasing the invoices from us. Once we advance your initial 80-92%, the factoring company owns the rights to the invoice and collects directly from your customer.
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