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If using the services of a factoring company seems to be an alternative worth exploring, be sure to do your homework before diving in. The first thing to look for in a factoring company, is a high level of professionalism.

When a factoring firm takes over your accounts receivable, it takes on the responsibility of contacting and collecting from your client. You want to be certain that your reputation in the marketplace will not be damaged by the behaviour of the factoring company, thus defeating the purpose of using the firm, which is to allow you to grow. Talk to the company about its method of handling accounts, including those overdue.

Indeed, one of the additional benefits of dealing with a factoring firm is that it screens your customers, doing its own credit check on them before agreeing to purchase accounts. If it finds that you are dealing with a bad credit risk, you'll be informed.

Prior to entering into any business relationship, it is important to fully understand the documentation at hand. Seek professional advice, such as your accountant, and feel free to ask the factoring company any questions. Remember, they are there to serve you. Here are some questions to ask when interviewing your factor....

• The average size of clients served
• Lengths of contracts, if any
• Are there are any set-up costs?
• How long does it take in order to process and advance?
• The method of making payments to you
• Recourse versus non-recourse
• Charge back periods for "recourse" receivables
• What are their usual collection techniques?
• What is their advance rate to you?
• What is their fee schedule to you?
• What are their terms regarding settlement on reverse accounts?

Fleet Street is proud of the reputation, straightforward approach and professional expertise we bring to the table each time you find the need to utilize our services to facilitate your growth.

Regardless of where you are located, give us a call at 416-929-9272, or send an , and find out how we can help you preserve valuable time, energy and money in order to grow your business.