How To Find Out Why Factoring Companies Must Frequently Confirm Invoices

Whichever invoice factoring company that remains established for however long will continually confirm invoice totals, authenticity, and other information related to the relationship.   Why is this necessary?  Because the only collateral the factor has is the client’s pool of accounts receivable and they have to make sure that collateral is valid and the payments will likely be made.   Unfortunately, there are those unscrupulous and desperate people that attempt to defraud the factoring company.  By not putting in place methods and systems to catch the fraudulent transactions, the factoring company is putting itself at risk.

procedures by the client that may place big exposure to the factor:

1. Submit a fraudulent invoice with a non-existent customer.
2. Find a “weak link” in the verification process and exploit it.  For example, they may discover that the factor doesn’t verify invoices less than $800.  Then they flood the company with phony invoices under $800 and receive the advances.
3. At some point, the client may have a tax lien imposed upon them by the IRS, but they neglect to report this to the factoring company.  Without a subordination agreement, the IRS can confiscate the payments from customers, leaving the factor high & dry.

Majority of people are normally honest and take these steps to defraud factors, however, these types of incidents happen all the time.  That’s why the factor must be cautious.

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Do You Keep On Top of Your Medical Collections?

Many of the greater healthcare factoring companies that fund physician groups, hospitals, clinics and other providers involve at least $100,000 in collectible receivables per month.  As the majority in the healthcare industry knows, it will not take long to rack up that level of billings for an average sized provider.  But what about the small, one person practice?  How can they benefit from the instant infusion of working capital that medical or dental invoice factoring has to offer?

Prime Bay Funding centers on factoring services for the minimum volume medical and dental practices.  We will work with those providers that produce collections from third party payers (insurance companies and governmental agencies like Medicare) of at least $30-50,000 per month.

Although each  case maybe handled different, but the advance rate  is between 70% to 85% of the expected net collectible receivables.  The monthly factoring fee will likely be between 2.75% and 3.25%, depending on collections history and length of time in business.

Receive now to you  a free, no-obligation medical or dental invoice factoring quote by following this link and fill out this simple client profile form.

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