Whether your business has an in-house accounting department or you use an outside CPA, unsettled client accounts can throw a wrench into your finances. Fortunately, there is a way to free up revenue that tied up in receivables from unsettled client accounts.
Unsettled Client Accounts and Cash Flow
When your clients still have outstanding receivables, gaps occur in cash flow. The lag in payments can lead to everything from uneven revenue cycles to being unable to make payroll or cover basic overhead expenses. Most of the time, unsettled client accounts are the result of staggered payment schedules that range from 30 to 90 days. While staggered payment schedules are a standard business practice, the lag created can force businesses to experience periods when there is more capital leaving the company than coming in, regardless of high sales.
Unsettled Accounts and Collections
In every business, there is a small percentage of invoices that age out of their staggered payment schedules. When this happens, businesses are forced to perform collections to get the revenue they are owed. However, the collection process can take up to a month and a half to complete, which adds even more time to the original invoice schedule and places a further strain on cash flow. Additionally, businesses have to spend resources on contacting and reminding clients of their unsettled accounts.
Resolving Unsettled Client Accounts Quickly and Efficiently
Invoice factoring takes care of the headaches associated with unsettled client accounts. Factoring takes outstanding invoices and converts them to cash within 24 hours. This eliminates the need to rely on staggered payment schedules, as well as the stress that comes with gaps in cash flow. Invoice factoring also removes the need to perform collections. Since revenue from receivables is made available within a single day, invoices do not get a chance to age out beyond their schedules.
Single Point Capital provides invoice factoring to help businesses streamline the accounting process and improve cash flow. We handle receivables from unsettled client accounts with staggered schedules of 30, 60, and even 90 days. Stop trying to power through the headaches of unsettled client accounts, and use invoice factoring solutions from Single Point Capital today.