Definition of financial term - Invoice Factoring
What is cashflow
This is the money going into your company and the money going out. This cash is often called 'working capital'.
Managing cashflow is key to business survival and growth and often seen as an indicator of a company's financial strength.
Releasing cashflowCompanies need to make sure enough cashflow is available to cover periods when a company's outgoing money exceeds income for example, when a company needs to pay staff wages.
Successful businesses often look for ways of releasing cashflow whilst avoiding bad debt. Using factoring services presents companies with an opportunity to convert unpaid invoices into cashflow to help control fluctuations in working capital.
Growing businesses in particular, often find that factoring presents a more flexible cashflow source than bank overdrafts or loans.