How AR Factoring Fixes Cash Flow Delays

If your business relies on steady cash flow to keep operations running, waiting months for customers to pay their invoices can feel like a constant uphill battle. AR Factoring has become a lifeline for businesses facing this challenge. By converting unpaid invoices into immediate cash, it allows you to bridge financial gaps, fund growth, and reduce the headaches of collections.

In this guide, we’ll break down what AR Factoring is, how it works, and why it’s a powerful tool for businesses like yours. Later, we’ll show how managing AR Factoring becomes even easier with Acumatica Cloud ERP and our customized solution.
 

What Is AR Factoring?

For many businesses, cash flow challenges can become a significant obstacle to growth. AR Factoring, also known as invoice factoring, offers a solution by turning unpaid invoices into immediate cash. This financial tool allows you to bridge payment gaps, fund operations, and reduce the administrative load of managing collections.

At its core, AR Factoring involves selling your accounts receivable (outstanding invoices) to a factoring company at a discount. In return, you gain fast access to funds while the factoring company takes on the responsibility of collecting payments from your customers.
 

How Does AR Factoring Work?

Let’s break it down step by step:
 

⓵ You Provide Goods or Services: Once the transaction is complete, you issue an invoice to your customer.

⓶ You Sell the Invoice: Instead of waiting months for payment, you sell the invoice to a factoring company.

⓷ You Receive Immediate Funding: The factoring company advances a percentage of the invoice value (usually 70–90%).

⓸ Your Customer Pays the Factoring Company: The factoring company collects the payment directly from your customer.

⓹ You Receive the Remaining Balance: After deducting their fees, the factoring company releases the remaining amount to you.

This simple yet effective process is especially valuable for businesses with long payment cycles or unpredictable cash flow.

Why Businesses Rely on AR Factoring 

Imagine you’re a manufacturer with a six-month production and shipping cycle. Your suppliers need payment upfront, but your customers won’t pay for months. AR Factoring bridges that gap, allowing you to keep operations running smoothly.

With the global invoice factoring industry valued at over $3 trillion, businesses around the world are using this tool to accelerate their cash flow and drive growth.

Challenges of Manual AR Factoring 

While AR Factoring can transform your cash flow, managing it manually can quickly become a headache. Businesses often face:

◉ Endless calculations for factoring fees and remittance amounts.

◉ Difficulty tracking invoices factored by multiple companies.

◉ Time-consuming manual updates to customer and invoice records.

These inefficiencies can slow your operations, introduce errors, and create unnecessary stress for your team.

Seamless AR Factoring in Acumatica: Our Solution

This is where we come in. At AcuPower, we’ve partnered with PreSales Leader to develop a robust AR Factoring customization for Acumatica Cloud ERP. Our solution eliminates the complexity of manual workflows, allowing you to manage AR Factoring seamlessly within your ERP system.

What Our Solution Offers

✔︎ Automation: No more manual calculations. Automatically calculate advance payments, factoring fees, and remittances.

✔︎ Customization: Tailor workflows to fit your business, whether you use only the AR module or require multi-factoring agreements.

✔︎ Integration: Connect invoices, credit memos, and sales orders for a streamlined process.

✔︎ Flexibility: Handle ad hoc factoring decisions or configure recurring workflows.

✔︎ Visibility: Track factoring details, approvals, and financial breakdowns in real time.

This isn’t just a feature—it’s a game-changer for Acumatica users.

Real-World Applications 

Our solution is designed for industries where AR Factoring is a lifeline:

◉ Furniture Manufacturers: Navigate long production and shipping timelines with ease.

◉ Apparel Distributors: Manage large seasonal orders and bridge payment cycles.

◉ Importers: Maintain liquidity while paying suppliers upfront.

With customizable workflows, our solution adapts to your unique business needs, ensuring it’s as versatile as the challenges you face.

Explore AR Factoring in Action 

 

Ready to see it for yourself? Experience the interactive demo to understand how the solution fits your workflows.

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Join Our Free Webinar 

Want to dive deeper? Join our webinar to learn more about the challenges of manual AR Factoring and see our solution in action.

Date: January 22, 2025
 

Time: 11 AM EST
 

Speakers:

    •    Jeremy Potoka, Founder of PreSales Leader

    •    Yuriy Zaletskyy, Co-Founder and CTO of AcuPower

What you’ll learn:

    •    How manual AR Factoring creates inefficiencies.

    •    A live demo showcasing automation and real-time tracking.

    •    Industry-specific examples of AR Factoring benefits.

Sign Up for the Webinar Now

Conclusion 

AR Factoring isn’t just a financial tool—it’s a catalyst for growth. With AcuPower’s innovative customization, Acumatica users can simplify workflows, reduce risks, and gain a competitive edge.

Ready to take the next step? Reach out to us. Let's make it happen! 

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