Dental Factoring: Extracting Payments From Open Invoices
While you have many different financing options as a business owner, one that you may want to consider is dental factoring. Factoring is a process where you sell your invoices to get the money now instead of waiting for them to be paid by customers so you can get money. This type of financing offers many benefits and may be exactly what you need to keep a good cash flow within your business.
How It Works
Dental factoring lets you work with a factoring company to get money for invoices that haven’t yet been paid. The factoring company will take your invoices and collect on them for you. You get the money due on the invoices now minus the fee charged by the factoring company. Once you sell your invoices, you no longer have anything to do with them. The factoring company handles them from that point forward.
Factoring can usually be done rather quickly. All you have to do is provide your invoices along with some information about your company. The money you get is not a loan. The factoring company is buying your invoices. They are also assuming any risk for collecting on those invoices, so when you applying for factoring, the company will likely look into your accounts receivables to ensure that your customers have a good history of paying invoices on time.
Makes Accounting Easier
Using factoring can make your accounting much easier. As mentioned, you won’t have to worry about invoice collections anymore. Instead of entering each invoice as income, you will just have one entry from the factoring company to make. It simplifies things and makes it much easier to track your business’ income. You are able to spend the time you used to on collections and account management on other tasks, which makes your business and employees more productive.
Improves Cash Flow
Another great benefit of factoring is that you can improve your business’ cash flow. Instead of having to constantly be unsure of when invoices will be paid and never knowing how much cash you will have on hand because you don’t know if patients will pay on time, you will be able to know exactly when you will get paid and how much. It gives you a chance to stabilize your income, making it easier to budget.
Dental factoring is just one financing option, but it is something that you should really consider if you are in need of cash right now. By selling your invoices, you get the money you need now along with some great benefits.