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moving the business off factoring

moving the business off factoring

co which moved to factoring severasl years back is now considering moving away from it, and back to the debtor/credit control full internal function, model

issues have arisen over costs charges and inability to fully reconcile between clients and Factor and cash !!

Has anyone been involved in a 'reversion back' and any vital issues which arose in the process.  Appreciate the legal charge in place, will utimately need clearing

Would appreciate sharing of any issues/ resolutions/ shortcuts etc

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06th Mar 2016 11:08

I faced a similar problem when in industry. Our fees base became ridiculous so we first changed Factors to one that charged a much lower rate. Later on as profitability improved we negotiated a bank loan to cover  the outstanding amount at the Factors Luckily we managed quickly to clear the loan thanks to a very good contract.

Your ability to withdraw will also depend on which Factors you are with

 

 

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By tom123
06th Mar 2016 16:13

For me it would be the source of funding instead.

I suppose for me it would depend on the source of funding in replacement - and the development of sufficient in house resources if you haven't had them for a while.

I imagine that you can pay off an existing factor with a large cheque without too much difficulty.

 

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07th Mar 2016 08:58

Incompetent

"inability to fully reconcile between clients and Factor and cash !!"

You mean the accounts staff are incompetent!

Although there can well be hassle caused by the factoring company staff unable to make the correct entries and customers paying into the wrong bank account it is easy to reconcile the figures. 

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By nrw
07th Mar 2016 08:59

FYI there are providers out there who will purchase individual invoices rather than taking on your entire debtor book - such as MarketInvoice. It's a lot simpler to administrate, and you only pay them when you need them. They're not the cheapest though - it really depends on your requirements.

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