The way you manage your AR (or lack thereof) has a huge impact on your funding options. Good AR management signals your creditors that they are dealing with a disciplined, methodical company, usually with very good odds of success. Proper AR management also reduces the payback risk and improves your eligibility for better, cheaper financing options. It makes speaking with potential creditors much easier. Moreover, it reduces the total funding need by accelerating the payment stream from your own customers.
For many lenders and factoring companies, your aging report acts as your score card. It is one of the first data points they check as they evaluate your financing application. Having a disciplined AR makes it a lot easier for your company to access the additional capital sources with competitive rates.
Proper AR Management is similar to building up your credit profile. For many companies, the cash need arises within a short term horizon and makes it critical to know what kinds of funding options are available to you. Knowing your overall AR health on a periodic basis and knowing the types of options that are available to you effectively makes it possible for you to access extra capital within a matter of days.
Being able to display your historical AR performance becomes a critical part of the evaluation process for many lenders. The more you can show that you were managing your AR according to best practices, the more likely it will be for you to access the types of financing with favorable rates. Better to get started today than tomorrow.