If you own or manage a business, you’ve probably experienced delays or difficulties in collecting accounts receivables from time to time (if not regularly).
Chasing after payments can take valuable time and energy—as well as tie up cash that may be needed to keep your business running. By outsourcing the challenges of account management with an accounts receivable management service, you can free yourself and your staff for other tasks and ensure that you’ll maintain a steady cash flow. Here are the answers to several frequently asked questions for those who want to learn more about accounts receivable management or factoring.
What is accounts receivable management or factoring?
Accounts receivable management is a broad term for a variety of services that include funding accounts receivables, collections and cash flow management. BBVA Compass’ Commercial Billing Service provides these accounts receivable management services, which allows business owners to focus on their core business and outsource the payment-chasing to an experienced provider like Commercial Billing Service.
How does Commercial Billing Service work?
When you outsource your accounts receivable processes to Commercial Billing Service you basically hand over your accounts receivable to an experienced account manager. Commercial Billing Service offers two programs—recourse or non-recourse.
“Recourse” means that Commercial Billing Service purchases your invoices, funding you a percentage of your invoices. You are still obligated to cover any invoices that go unpaid, but Commercial Billing Service has some of the highest funding percentages in the industry. You will receive bi-monthly release of reserves.
“Non-recourse” means that Commercial Billing Service handles purchases your invoices and assumes the risk from unpaid accounts, so you have no bad debt losses. You can get same-day funding for invoices owed, with no time waiting for checks to clear or customers to pay their bills. All of the collection work is handled by Commercial Billing Service, sending monthly statements and contacting delinquent accounts.
With either option, you have online account viewing, tracking and reporting. And you’ll also get immediate cash for your accounts receivable—which results in improved cash flow for your day-to-day business operations.
What types or sizes of business might need Commercial Billing Service?
Businesses of any size may benefit from Commercial Billing Service, but small and medium-sized businesses that often wrestle with cash flow challenges may find these services most beneficial.
Commercial Billing Service can be helpful for businesses that need ongoing funding to maintain substantial inventory or production materials, or for those that have long sales cycles, seasonal sales, or slow paying customers (like large corporations or government agencies).
What are the benefits of Commercial Billing Service?
When you outsource accounts receivable and collections, you’re able to save money on staffing and on lengthy collection processes. Instead of worrying about collecting on past due invoices, you and your staff can focus on increasing sales or developing new products and services. By working with an experienced account manager, you’ll access greater efficiencies in accounts receivable while maintaining the day-to-day cash flow you need to keep your business growing.