Similarly, there is a misconception about factoring that the company hands over a lot. You would no longer have a view and grip on the debtors and contact with customers disappears after the invoices are transferred to the factoring company. Not entirely crazy that this is thought, because in the 1980s and 1990s this was also partly true. The administration of invoices was mostly done manually, both at the company and at the factor company. Today, however, things are different!
Advanced
Over the last 20 years, administrative systems have become increasingly sophisticated and the ability for systems to communicate with each other through so-called APIs has also changed the financial world. The factoring company can better rely on its client's automated administration, saving a lot of time and costs. The company itself can send reminders and dunning letters from its administration. With the link to a specialised credit management system, this can even be done almost fully automatically. Reminders and demands are then e-mailed from the system to customers based on pre-set specifications. The employees responsible receive a signal when which customers need to be contacted by phone. It is also possible to link your own credit management system to that of the credit insurer. This ensures that the correct limits are always available and that overdue debtors are also transferred to the insurer fully automatically and on time. This prevents loss of coverage on a claim.
Buyers don't even notice
This high level of automation, which is now also accessible to SMEs, eliminates the need for the factoring company to take over its client's entire receivables management. The entrepreneur invoices himself, the ERP system transfers the receivables, the factoring company transfers up to 90% of the transferred receivables (including VAT) to the company a day later, and through periodic updates, the factoring company stays abreast of any overdue receivables. With this method, the company retains full management as well as contact with its buyers. And the customers? They don't even have to notice that a factoring company is involved!
Long live progress!
