openPR Logo
Press release

Invoice Factoring: From face-to-face finance to tech powerhouse

11-21-2016 01:59 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: Invoice Factoring: From face-to-face finance to tech powerhouse

/ PR Agency: (888) 979-1487
The invoice factoring business – now a $3 trillion-a-year global industry – can be traced to ancient trading practices and medieval financial arrangements. Yet the premise, getting paid upon completion of work rather than waiting weeks or months for customers to pay their bills, remains unchanged. Imagine a weaver sending linen from Cairo to a merchant in Damascus, but the merchant won’t pay for the fabric until he sells it. A factor, a third party with adequate resources and either personal knowledge of the merchant’s good reputation or the wherewithal to track him down and collect payment, will advance the weaver the money he is owed, minus a hefty fee for taking on the risk of non-payment.

For centuries, the dual issues of verifying that the hypothetical shipment was sent and received and then guaranteeing that the merchant would pay were the crux of the factoring risk equation. The individuals who factored bills for clients had to go with their gut when sizing up the client’s customer. Would he pay or not? If the customer claims that he didn’t get the goods, where’s the proof?

Those verify-and-guarantee obligations continue to be critical for the modern factoring company, but its methods have evolved from case-by-case judgment calls to millions of transactions a year at the speed of light. Although the client relationship may remain one-on-one with a factoring company’s account managers, often with extensive phone and email communication, the behind-the-scenes electronic processing of invoices is totally driven by technology.

Interstate Capital, a factoring company processing about $1 billion of invoices annually, considers itself in the tech business – a high-tech company expediting working capital to over 1000 clients a year. “We are constantly investing in new technology to help our clients get funded faster than ever before” says Tony Furman, president and co-founder of the international firm founded in 1993.

As recently as seven years ago, Interstate Capital’s clients would fax, mail, or overnight the day’s invoices to the company and then follow up with notices that their customers had received the goods or services. Stacks of invoices would be sorted and checked against stacks of proof of delivery documents for goods and receipts for services. Lastly, checks for the advances on the invoices would be requested, cut, and mailed to the clients, with piles of paperwork left for filing and storage.

Improvements in scanning technology, advances in banking reports and accessibility, and even GPS capabilities have resulted in faster processing of payments, greater economies of scale – and, the good news for today’s clients, much lower factoring fees, thanks to instant and accessible verification processes. Using a combination of proprietary and third party applications, some cloud-based and some hosted by a room of roomful of secure servers, Interstate Capital also grants clients the Holy Grail for accounting: complete transparency and real-time access to the status of their customers’ payments.

Here’s a quick look at how technology tackles the first factoring challenge: verifying that work was completed. Since the vast majority of trucking companies across the country factor their freight bills, let’s use that industry for an example. Think of a mom-and-pop business with one driver on the road. For years he would mail home his bill of lading (the document used industry-wide to record route, cargo, weight, load number, etc.), along with a rate confirmation sheet outlining what the shipper will pay and the signed proof of delivery. His bookkeeper (read “wife”) would then type up an invoice to mail to the customer with those documents. By the time the customer gets the bill, a week or two have passed since the freight was unloaded. Then the shipper gets to take 30 days or more to pay for that load.

Today, the shipper can verify when freight was picked up and dropped off by tracking the driver’s location through cell phone apps with the GPS locators; most apps ping the driver’s location every few moments. The phone also provides scanning technology to take high-quality images of the bill of lading, rate confirmation and proof of delivery. These docs get seamlessly uploaded straight to the factoring company – no more mailing back and forth.

Other drivers use traditional scanning equipment at truck stops or submit their paperwork at drop boxes in truck stops everywhere. Those documents are scanned into the factoring company’s records as soon as they are received for faster funding. Optical character recognition (OCR) technology captures data from documents to pre-fill forms for better accuracy and faster processing.

Technology’s approach to the next challenge, getting paid back by the client’s customer for the advance extended to the client, takes the gamble out of the guarantee. Once a call left to an expert’s eyeball-to-eyeball evaluation of a customer’s ability to pay, confirming the creditworthiness of customer online is now instantaneous. With Interstate Capital’s payment database of over 100,000 customers available for clients to peruse, they can make educated decisions about the jobs they take on and the risks they want to assume.

In the factoring world, technological advances dramatically simplify the verification process, ramp up the speed of funding (now more likely wire transfers and ACH deposits than checks, increase accuracy, and offer instant access to once-elusive credit histories to support -- or deny -- guarantees of payment. The result: lower hurdles for small businesses to gain access to working capital and lower factoring rates across the board. New technologies are on the horizon to continue the growth of high-tech factoring companies.

In the factoring world, technological advances dramatically simplify the verification process, ramp up the speed of funding (now more likely wire transfers and ACH deposits than checks, increase accuracy, and offer instant access to once-elusive credit histories to support -- or deny -- guarantees of payment. The result: lower hurdles for small businesses to gain access to working capital and lower factoring rates across the board. New technologies are on the horizon to continue the growth of high-tech factoring companies.

Interstate Capital Corp
1255 Country Club Road,
Santa Teresa, New Mexico
88008 USA
Phone : (888) 979-1487
Fax : (575) 589-1999

This release was published on openPR.

Permanent link to this press release:

Copy
Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.

You can edit or delete your press release Invoice Factoring: From face-to-face finance to tech powerhouse here

News-ID: 385182 • Views: 1156

More Releases for Interstate

What's driving the Cold Chain Market| Americold, Preferred Freezer Services, Int …
A comprehensive Study accomplished by Data Bridge Market Research on both global and regional sales of Global Cold Chain Market which provides a better understanding of the present market Size, landscape, Development, status and Growth Opportunities during 2019 to 2025. The study is a mix of qualitative and quantitative Market data collected and validated majorly through primary data and secondary sources. The market Study is segmented by key regions which
Conductive Tapes Market 2025 - Laird, MTC, Schlegel Electronics Materials, Kemtr …
The latest market intelligence study on Conductive Tapes market relies on statistics derived from the application of both primary and secondary research to present insights pertaining to the operational model, opportunities and competitive landscape of Conductive Tapes market for the forecast period, 2018 - 2025. Download FREE Sample Copy of Conductive Tapes Market spread across 108 PAGES, profiling 9 companies and supported with Tables & Figures is now available @
Terpenes Machine Market – Evolving Countries, Type, Application & Global Manuf …
HTF Market Report released a new research document of 115 pages on industry titled as 'Global Terpenes Market by Manufacturers, Countries, Type and Application, Forecast to 2022' with detailed analysis, Competitive landscape, forecast and strategies. The study covers geographic analysis that includes regions like North & South America, Europe , Asia-Pacific, Africa and important players/vendors such as Kraton, Natural Fractions, Interstate Commodities................The Report will help you gain market
Global Conductive Gloves Market 2017- Interstate Group , Bertech (Interstate Gro …
The Global Conductive Gloves Market 2017 examines the performance of the Conductive Gloves market. It encloses an in-depth judgment of the Conductive Gloves market state and the competitive landscape globally. This report analyzes the potential of Conductive Gloves market in the present and the future prospects from various angles in detail. The Global Conductive Gloves Market 2017 report includes Conductive Gloves industry volume, market Share, market Trends, Conductive Gloves Growth aspects.
Interstate Resources, Inc. Relocates Headquarters within Arlington, VA
(Arlington, Virginia) 15 February 2011 – Interstate Resources, Inc., an East Coast-based group of corrugated manufacturers and member of the multinational INDEVCO Group, has moved office locations in Arlington, Virginia. The company's new address is: Interstate Resources, Inc. 1300 Wilson Boulevard, Suite 1075 Arlington, Virginia 22209 Tel: 703-243-3355 Fax: 703-243-4681 E-mail: info@interstateresources.com Web: www.interstateresources.com The company telephone numbers have not changed. Interstate Resources Container Division supplies corrugated retail-ready packaging and cartons, POP displays, GREENCOAT®
Interstate Container Cambridge to Exhibit at International Poultry Expo 2011
(Cambridge, USA) Interstate Container Cambridge will exhibit at the International Poultry Expo 2011 in Hall B, Booth 5960. The world’s largest poultry and egg exhibition will take place from 26 - 28 January 2011 at Georgia World Congress Center in Atlanta, Georgia. Interstate Container Cambridge is a member of Interstate Resources Container Division and a member of INDEVCO Group. The corrugated manufacturer developed innovative GREENCOAT® wax alternative corrugated boxes for poultry