Invoice factoring online with Fast A/R Funding

How we Handle Collections         

The quick answer is that we electronically assist our clients in the collection of accounts receivable.  This accounts receivable are basis for an "advance" with cash proceeds going to our clients, and are made based on a factoring agreement with Fast A/R Funding. Although we provide electronic assistance, the ultimate responsibility for collections remains with our clients.  

In the past we have talked about the online invoice creation process using our system, so today we will focus on how we handle the collection of our client's accounts receivable that are the results of invoice factoring with Fast A/R Funding.

The collections process starts with the initial notification provided to our client's customers.  This notification is provided when a copy of the invoice created with our system is email to the customer (this link will take you to a blog entry that discusses online invoice creation in more detail). This email includes a copy of the invoice itself along with whatever backup documentation is provided.  This could be times sheets for a service company, or bills of lading that prove the goods have been shipped and delivered to the customer.  As part of the initial notification we also require the customers of our clients to electronically authenticate the validity of the invoice, and agree to pay Fast A/R Funding directly.  The same day that we send the invoice and backup by email, we also print the invoices and mail them to the customers.

At this point in the process the customer has been emailed the invoice and supporting documents that have been electronically authenticated by them, and also received a paper copy.

Regardless of the terms extended to the customer (30 days, 60 Days, etc.) by our client, a few days before the invoice becomes due we automatically send them a reminder email that the invoice will be due soon and that they need to be sure to send payment directly to Fast A/R Funding.  

Once the invoice becomes due our system automatically sends the customer notice periodically that the invoice is due and that payment needs to be sent directly to Fast A/R Funding.

Because our fees are variable based on the amount of time it takes invoices to be collected, and collection of invoices creates availability for our clients, our clients are motivated to keep the collection period as short as possible.

The following is a brief simple example of how collections create availability for our clients.  In the example we assume that the advance made of $8,000 at day 1 is for 80% of the invoice value of $10,000.  In order to keep things simple we aren't including a fee charged by Fast A/R Funding that would reduce the amount of availability on Day 30.

                                                                    Invoice          Advance           Availability

Day 1 (invoice factored,advance made)    $10,000        $8,000            $0

Day 30 (invoice collected)                        $0                $0                  $2000

To learn more about invoice factoring with Fast A/R Funding click the button below.