How to Get Better Rates and Terms
1. Sell your invoices often
One of the benefits of a competition-based solution is that your invoices sell at top dollar as Buyers compete to purchase your receivables. This effect is even greater when you sell your invoices on a monthly basis as it increases your visibility and builds your history within the buying community.
2. Sell your receivables soon after invoicing
Selling invoices as soon as you invoice your customers will drastically cut down your Day Sales Outstanding (DSO). Go a step further and establish a standard business practice in your Accounts Receivable department to expedite the sale of receivables through the Exchange. This enables you to reinvest the sale proceeds into your business quickly.
3.Sell the receivables of your best customers
The creditworthiness of your customers influences the advance and discount rates. Buyers pay close attention to the credit quality of the company that will be paying the invoice and place a heavy emphasis on the customer's ability to pay the outstanding invoice when it is due. When you demonstrate that these customers have a history of timely payment, Buyers compete more aggressively for your invoices.
4. Sell the receivables of large publicly held companies over small privately held companies
Larger customers often have the longest terms of credit, which can lengthen the DSO on your financials and result in a shortage of working capital. Invoices from large public companies are excellent choices to sell because information is readily available for Buyer analysis through public filings. With the depth of information available on public companies, Buyers are better able to assess the risk inherent in the receivable.
6. Bundle smaller invoices to reach our $10,000 minimum requirement
Bundling multiple, smaller invoices of different customers will save money on fees and streamline your cash flow process. But make sure to keep their credit quality similar. Bundling invoices from customers of varying credit quality can dilute the credit quality of the invoices and increase rates.
7. Ensure the invoices you sell have at least two weeks duration
Invoices that are scheduled to be paid in 30+ days are ideal, though invoices with a duration of two weeks or less can also be sold. The Buyer's returns are based on invoices with 30-days duration, so Buyers may seek a higher discount fee based on the fees they pay and the potential return.
8. Stay on top of your customers to ensure prompt payment
The returns our Buyers earn are based on the number of days their funds are outstanding until your customer remits payment. If you simply sell your invoice and neglect to follow up with your customer for payment on their due dates, you will be incurring additional costs for each day your customer does not pay. To avoid these additional fees, follow up with your customers to ensure timely payment.