We Provide Working Capital for Your Business via AR Factoring

Our founder Justin launched AccountReceived.com in 2015 and focused solely on truck factoring (also known as freight factoring) to provide expedited cash to trucking businesses in exchange for unpaid invoices. After offering valuable support for hundreds of trucking enterprises seeking rapid access to working capital or lacking resources for efficient invoicing and collections management, we quickly expanded to other factoring services, including invoice factoring, payroll factoring, staffing factoring, manufacturing factoring, and distribution factoring. We’ve since helped thousands of business owners get cash for their accounts receivable!

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The #1 Accounts Receivable Management Services
Accounts Receivable Management Services

What Makes Us Different?​

We offer rapid accounts receivable based funding solutions, ensuring you get paid swiftly.

Startup

Even if you’re new, factoring doesn’t require a long operating history.

Growth

Fund your business growth with invoice factoring.

Credit Issue

Factoring is the alternative that doesn’t hurt your credit.

Emergency

Unexpected expense? Factoring can get you funds.

Invoice Factoring Enables you to Sell Open Invoices and Receive Cash

Curious about how invoice factoring operates? It’s a straightforward financing method that could be a game-changer for your business once you grasp its mechanics.

Who’s Involved in the Factoring Process?

Three key players participate in a factoring transaction:

  1. The Seller (Your business)
  2. The Debtor (Your business’s customer)
  3. The Factor (The factoring company)

Breaking Down the Five Steps of Invoice Factoring:

  1. The Seller provides a service or product and issues an invoice to the Debtor.
  2. The Seller forwards the invoice to the Factoring Company for funding (e.g., Day 1).
  3. The Factoring Company advances 80-90% of the invoice value to the Seller, deposited into their business account (e.g., Day 2).
  4. The Debtor submits payment to the Factoring Company, which deposits it into a lockbox in the Seller’s name (e.g., Day 25).
  5. The remaining 10-20% of the invoice value, minus a nominal Factoring fee, is released to the Seller (e.g., Day 26).

Advantages and Disadvantages of Factoring

Although invoice factoring offers various benefits, it’s essential to understand its potential drawbacks, depending on your business’s nature and the factoring partner you select. Here’s a breakdown:

Pros:

  1. Immediate access to cash for your business.
  2. Simplified and expedited approval compared to traditional bank loans.
  3. No impact on your credit score.

Cons:

  1. Potential reduction in profit margins.
  2. Beware of hidden costs and fees from unreliable factoring companies.

Evaluating Qualifications for Invoice Factoring

To be eligible for factoring, your company must meet certain criteria, including:

  1. Invoices available for factoring.
  2. Creditworthy clients.
  3. Completed factoring application.
  4. Accounts receivable aging report.
  5. Business bank account.
  6. Tax ID number.
  7. Personal identification.

Navigating Tax Implications of Factored Receivables

While invoice factoring offers numerous benefits, understanding its tax implications in the United States can be complex. The IRS evaluates several factors to determine the taxability of factored receivables, aiming to prevent tax evasion or avoidance schemes.

Dispelling Common Myths about Invoice Factoring

Misconceptions about invoice factoring abound. Let’s debunk a few:

  1. It’s only suitable for struggling businesses.
  2. It’s too expensive to be sustainable.
  3. It’s inaccessible for businesses with bad credit.
  4. All factoring companies are alike.

Choosing the Right Factoring Partner

Selecting the ideal factoring company is crucial for your business’s financial health. Consider the following factors:

  1. Range of services offered.
  2. Recourse vs. Non-Recourse Factoring.
  3. Spot Factoring vs. Whole Ledger.
  4. Industries served.
  5. Rates, fees, and structures.

Is Invoice Factoring a Fit for Your Business?

If your business aligns with the following characteristics, invoice factoring could be a viable solution:

  1. B2B customer base.
  2. Payment terms of 30 to 90 days.
  3. Fair or poor credit.
  4. Limited operating history.
  5. Few or no assets for collateral.

Comparing Factoring with Other Financing Options

While invoice factoring is beneficial for many businesses, it’s essential to explore alternative financing options and choose the one that best suits your needs and budget.

Ready to Explore Invoice Factoring?

Contact us today for your free quote, and within 24 hours, a representative will be in touch to assist you. Don’t let cash flow constraints hinder your business growth—we’re here to help.