Is a factor really a debt collector?
A common question a potential client will often ask me is: Will you hassle my customers? The simple answer to this is no. Yes we do collect your money for you and yes we do chase payments for you. However, factors only really do what you do, or what you should be doing. This means we simply follow up on invoices that become overdue to find out if there is a problem so we can rectify it ASAP. Usually this involves a simple phone call or email to your customer.
I was having dinner with a very successful printer friend of mine and his comment to me was “I am a customer’s best friend until they owe me money”, he went on to say that chasing and collecting money that is owed is a task that can make or break a business. When you run a small business without a dedicated accounts department chasing invoice payments can be a real distraction.
So really in essence factoring is a ‘soft collection’ process, performing the collection task that you would or should normally undertake in your business.