Invoice Factoring for Freelancers Industry News 26th September 2013 | By Liberty (Image: Sweet Success under CC By 2.0) Working for yourself is a dream for many. With no one to answer to and the ability to pick and choose work, freelancing couldn’t seem any better. However, like with everything else, there are drawbacks. Working from home can be lonely, you’re responsible for the entire workload and you have to do all the paperwork. Guaranteed Cash Flow If you are a freelance writer, a self-employed builder or a freelance event planner, you will be well aware of the struggles to assure payment from your clients. A freelancer is a self-employed individual who is not committed to an employer for long periods of time and therefore does not have the security of an organisation. One of the main problems associated with freelancing is the lack of cash flow. All work is done by yourself so you don’t have any financial backing or a team of employees to chase up outstanding payments. Any time you spend on the details of cash flow takes away from your work you could bill for. Invoice Factoring Can Help It can be daunting to confront a large corporation as an individual, and often expensive too. If you don’t have the time or the muscle to approach a company for outstanding payments then you may want toconsider invoice factoring. Invoice factoring involves the sale of invoices to a third party who will collect payments on your behalf. This middle man will pay you around 95% upfront and claim the remainder as a collection fee. When you seek the services of a third party collection agency you can receive your funds in less than ten working days. Invoice factoring is extremely useful for freelancers as it gives the security of assured cash flow. When you know how much money is due to come in you can make plans for the future. With guaranteed finance you can expand your business without the fear of over extending. In a highly competitive business world, company progression could open many doors for future opportunities. Unlike with a bank loan you don’t need to create a business plan or show how you will make repayments as this agency is simply recovering the debt you are owed. This is not a loan. Invoice factoring is a quick solution to get your business functioning again. There are many myths associated with invoice factoring such as: it ruins client relationships and it is a service for failing businesses. Despite these myths the only minor drawback of invoice factoring is that some factoring companies will require you to meet a minimum turnover requirement – something a self-employed individual may not have. If you are a freelancer and you need help getting your clients to pay up, get in touch and we can discuss your options and answer any questions you may have about invoice factoring.