Do nothing or take action and recover funds from overdue invoices?
Many times, they do nothing, fearing the deterioration of relations with the recipient. They recognize that it is better not to take radical steps and simply wait for the payment of the dues. By acting in this way, however, they are putting their own company’s liquidity to the test . There is no telling how long it will take for repayment and how many more customers will behave this way. Such a course of action may therefore prove risky, but nothing is lost. There are services available on the market that can successfully prevent such problems – among them is maturity factoring. By opting for this type of solution, we do not expose ourselves to the deterioration of relations with business partners. What does such a service look like in practice?
Maturity factoring a way to deal with overdue invoices
Factoring is usually associated with financing invoices that have not yet matured. Maturity factoring, on the other hand, deals with receivables already due. Importantly, even a single contract or even a single invoice can be submitted for such financing . This type of factoring assures the customer of timely payment on invoices. It allows entrepreneurs to obtain funds, from which they can then execute further orders without disruption.
Maintain good relationships with partners and liquidity
Entrepreneurs should keep in mind that maturity factoring is a safeguard for the company. In addition, it supports the relationship between the supplier and the customer. When a counterparty is unable to pay an invoice issued by us on time, the factor takes over the obligation to pay it. The consignee can then remit the receivable late, and our company receives funds from the factor. With the maturity factoring service, entities receive what they need in a given situation – one time and the other money. Thus, factoring reduces the risk of conflicts between counterparties and ensures that minor shortcomings do not flow negatively into the partners’ relationship. In addition, thanks to the presence of a factor in the process of paying receivables, our customers feel more disciplined and there is a real chance that they will pay invoices on time in the future.
