All businesses are effected by how quickly they receive payment for services rendered. It can mean waiting on the essentials to keeping your business up and running. With transportation, it’s about fuel and equipment to keep trucks operating. Staffing companies are concerned with paying employees on time. Manufacturing needs raw materials to ensure they can meet the demands of their customers. No one has time to wait on outstanding invoices when cash flow is critical to your business operations. So, what does invoice factoring have to do with resource allocation? Everything.

First, let’s start with the core benefits of invoice factoring. In a nut shell, invoice factoring allows your organization to turn your invoices into immediate cash. Your company provides your services as usual, but instead of waiting 30, 60, or 90 days for your client to provide funds, a factoring company provides you with cash, same day, and then collects the remainder of your payment on your behalf. Essentially, they become your collections department. When you factor, some factoring companies take over the collection duties so you and your organization can focus on what you do best. Run your business.

Responsibility Overload
When running an organization, small or large, there are many different responsibilities and facets to keep it successful. Your priority is delivering quality services or products to your clients and customers, but what responsibilities do you really have time for and where do they fall on the priority chain?

Planning and Strategy
As a business owner or executive, you need to define a path for the success of your business. Think about the challenges your business faces from competitors or new trends that can be taken advantage of. This requires your time and is one of the most important aspects of running your company.

Finance/Accounting/Collections
How is your company funded? Do you have money to grow? Are you just playing catch-up? These are some of the critical things to consider as your company continues to progress. Managing the day-today tasks such as procuring retail space, office equipment and hiring employees can take up a large part of your week and budget. You’ll also need to set up and maintain business bank accounts, payment processing, accounts payable and accounts receivable, and taxes. The most important of all of these is collections. Making sure you are paid feeds all of the above and can be a taxing responsibility when trying to manage everything else.

Legal
Small business owners must comply with federal and state business licensing laws. From forming a limited liability company to creating legal contracts, they must know basics of the law and have access to an attorney if legal problems with customers or employees arise. You might need to write, review and sign legal contracts and sales agreements. When legal issues occur, you’ll need to consult a lawyer.

Business Development (Marketing and Sales)
No matter how good your product or service is, you need to drive business. Marketing and sales strategies and implementations vary widely, depending on the business, and could include tactics such as print advertising, public relations, online marketing, networking, cold calling and commissioned salespeople. This is a balancing act in itself. How do you attain new business while providing quality service to your customers?

Customer Service
In the beginning, many small business owners are responsible for providing all or most of the customer service duties. These include phone calls, email messages and follow-ups concerning product delivery and quality issues. As the business grows, it makes sense to automate and hire customer service people, when possible, to scale operations and growth.

Human Resources
As a small business grows, so does its hiring needs to accommodate more orders and faster growth. The owner needs to identify human resources needs, write job descriptions, screen and interview candidates, train, manage and pay employees. For some businesses, it makes sense to hire a dedicated HR manager to handle screening, hiring, training and employee-related processes.

Conclusion – Cash flow is key to generate continued business growth
There is more to running a business than just providing products or services to your clients. These extra responsibilities can crush a business’s ability to provide quality service and product to the point of failure. It’s clear that your organization needs help to manage many of these responsibilities whether it is through technology or more resources.

Invoice factoring can be that push to keep small businesses running and take large businesses to the next level. For many of the above responsibilities, hiring additional resources is the most logical answer, but where does the money come from? When your company is dependent on being paid on time, factoring could be the solution to ensure continued expansion. Through consistent cash flow and outsourced collections, factoring allows your organization to free up time as well as fund your business, hire more resources and invest in technologies to ensure business success in the short and long term.