We have a client who specializes in software and electrical engineering for the cell phone tower industry.This client has optimized his use of our invoice factoring product through a careful analysis of its use and costs.
Every month, for over a year, the client selects one to three invoices due from the same customer for sale to IFG.The invoices are already 15 to 30 days old when they are offered to IFG.The client knows IFG has approved this customer in the past and that the customer will pay the invoices to IFG in 28 to 32 days after we purchase them.The client usually requests a 70% advance which then sets the daily rate at approximately .0017 (.17%).
The client’s purpose in using our services is simple: this quick and reliable influx of cash every month enables the client to meet his payroll obligations and pay his expenses without any hassle or scrambling around and calling customers for payments.
The client knows that the 70% advance that sets the daily rate establishes a 30 day cost for his business at about 5% of the total value of the one to three invoices he is selling to IFG.Since we are only buying these few invoices, from the ten or more he issues every month, the clients cost is an even lower percentage of total monthly billings.
This is a smart way to think about and use this valuable invoice discounting service.
Submitted by Lorin M. Spak
Barrington Hills, IL
888-253-0645
This client obviously understands the service and how to use it to maximum benefit. We need to educate other clients to follow this model.