Suppliers usually demand quick payments.

The main issue many distribution companies experience is that their suppliers typically require fast payments, usually within ten days. Some vendors may even require prepayment if the distribution company is small, new, or doesn’t have the greatest credit yet.

Clients pay within payment terms of 30 to 90 days.

Most distribution companies clients are given payment terms, which means that they’re billed an invoice and have anywhere from 30 to 90 days are receiving it to pay the balance. Payment terms are typically non-negotiable.

Delayed payments can cause cash flow problems.

Unless your business was started with a large cash reserve, or have built one up, payment delays typically lead to cash flow problems. Since the vendors you order from require quick payments, but your clients pay slowly, you end up making up the difference from your reserves. If you continue to spend money from your reserves, business growth will be put on hold.

Invoice factoring can help your cash flow.

If your clients are paying within 30 to 60 day time frames, and your business needs that money sooner, you should consider factoring your invoices with CoreFund Capital. Invoice factoring will provide you with immediate funding for every invoice you factor. We would advances funds to your company, while holding your invoices as collateral. We then collect the original payment from the client that pays the balance on the invoice.

If you’d like to know more about the advantages that invoice factoring can provide your distribution company, feel free to contact us today!