• 18 Jul

    Factoring For Seasonal Invoicing Peaks

    Factoring can be used to smooth out the cash flow problems caused by seasonal peaks in invoicing and trading. A "seasonal peak" is when the trade, and hence invoicing, of a business is not even throughout the year. A classic example might be a fireworks manufacturer. Most of their annual turnover is likely to be concentrated around bone fire night. There are also many other, less dramatic examples. This concentration of trading into particular weeks, or months, can create huge cash flow pressures for a business. Factoring can help smooth out cash flow "humps" by releasing the cash which is tied up in sales invoices as soon as they are raised. This cash can then be used to pay the suppliers of the business, which is often the issue for businesses that experience seasonal trading peaks.

    By Glenn Blackman

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berkeley