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Advantages of Factoring
Advantages of Factoring
 
 
 
The enterprises which transfer the risk of non-collection of the receivable to the factoring company by means of benefiting from the guarantee service of the factoring to the factoring company can extend their domestic and foreign markets.
 
With the prepayment provided by the factoring company, the enterprise can purchase the raw material by means of prepayment and ensures important discounts and reduces the production costs. More profit opportunity is provided.
 
The receivables, stocks and trade payables decrease and the operational capital which could be created by the enterprise increase. The balance sheet becomes more liquid.
 
The competitive power of the seller increases because it will be able to recognize term for the buyers.
 
According to the reliable intelligence results, the enterprise managers which make the sales to the buyers having the payment power become aware of the financial situation of the buyers that have the most important investments directed at the future as soon as possible.
 
The managers get rid of thinking of the collection of the receivables and the control of the credit. Because the cash flow is determined, they can make productive and reliable plans for the future.
 
The potential language problems with the buyer are eliminated. The occurring problems are solved with the factoring company in its native language.
 
Because it is not necessary to perform sales accounting and book records, the administrative expenditures of the enterprise decrease and the times of the managers increase.
 
Because the prepayment is given upon the need and request of the seller, the enterprise does not utilize bank credits in unnecessary times and the interest expenditures may decrease.
 
 
 
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