Finance - Week 8

Factoring process involves a financing arrangement that assists in improving the cash flow in firms with invoices that are slow-paying. The process helps firms in their financial needs so that they can b reach their maximum level of growth. The finance assistance extended acts as an alternative to conventional capital markets.  The process may involve an increase on the amount of cash that a given firm may have on hand at a particular time, which in turn gives it flexibility. The flexibility allows the companies to take advantage of emerging opportunities as. Winston Financial Group provides such assistance to different organizations including transportation carriers and brokers, staffing agencies, manufacturers, distributers , oil and gas firms , security firms , IT and technology related firms and even the government (Winston Financial Group, Inc., 2018).  The services are needed by companies that are focused on growth, that are young or not qualified to access banking financing, are experiencing tax problems or those with whose balance sheets are not strong.  

For Winston Financial Group, Inc., as long as a firm is selling a certain product or providing some services to other businesses, there are programs that meets their needs in terms of account receivable amount. This enables firms to qualify for factoring of a specific size of account receivable.  The firm encourages firms to be part of the collection process, but many firms choose to have the provider monitor and even pursue the collection on its own. This enables them in reduction of cost normally arising from the collection process.  Winston Financial Group, Inc. can buy any kind of valid receivable for a product that has been accepted or delivered or services provided on behalf of other organizations.  The factoring process has largely been recognized and accepted so that almost all retailors in U.S. leaves a blank while preparing purchase orders highlighting whether the resulting invoice will factored (Winston Financial Group, Inc., 2018).  

While in the past the process has been accessible to organizations whose receivables surpassed $ 20 million, the current technology advances enable firms such as Winston Financial Group to provide the services to even small business without much administrative expenses being incurred.   Given the strict credit parameters set by traditional institutional lenders, factoring process has become a better financial tool among small and medium firms.  The business do not have to go over the same procedures found in banking finance. This is because firms like Winston F Group, Inc., has complete application and even a detailed report of accounts receivable and thus the services are offered with shortest time possible (Winston Financial Group, Inc., 2018).

There are various benefits that can be attributed to factoring. The process turns the invoices of the firms into the required operating cash instantly.  The firms can obtain their cash within the shortest time possible and specifically within hours for the many of the invoices.  The factoring process can ensure an improved credit rating by offering cash for settling bills within a short period. The firms can also be able to meet their obligations in terms of tax and payroll obligations.  The buying power of organizations is also increased since they can exploit the advantages provided by discounts on purchase through cash.  Customers can also be given better credit terms while customer relationship can be improved since potential disputes are reduced through a confirmation that products have been received.

Reference

Winston Financial Group, Inc. Retrieved from: http://www.winfin.com/