Factoring is an essential process for a developing company. It is a process where a company sells unpaid invoices to a third party at a discounted rate. After that, the third partyhandles the customers and receives money from the customers. The factoring company pays you some advance money while receiving the invoices. When the invoices are cleared by the customers, they pay you the remaining amount. factoring company singapore does not differ much from other companies globally. Here are the steps involved to approach a factoring company in Singapore:
- Application and Verification
The first step is to apply to the factoring company. Many companies have launched their online portal. They have a verification procedure. On qualifying the verification process through valid documents, the factor offers to buy the receivables accounts like unpaid invoices.
- Transfer of amount
The factor pays you a certain amount as an advance based on the invoices. This cash proves valuable if your company is suffering from a loss. Many companies approach factoring companies when they are facing a financial crunch.
- Clearing the invoices
After receiving the invoices, the factoring company deals with the customers. When customers clear the dues, the factoring company pays back the remaining amount to the concerned company. This reduces the load on the company as the factor handles all the stress concerned with the customers.
These are the basic steps involved in approaching the factoring company. The introduction of these companies has resolved the issue of the immediate financial crisis in many companies.