Factoring offers numerous advantages when it comes to financing sales to public entities. José Roca has written an article on this topic published in the digital newspaper El Confidencial. Titled “Factoring: One of the Best Ways to Finance Sales to Public Entities,” it highlights the importance for our business fabric of «providing services or selling goods to public entities. More than 17.6 million invoices were submitted in 2023 through FACe, the General Entry Point for State Administration Invoices, with this indicator maintaining a year-on-year growth of over two digits for the past three years.»
Kaizen Consulting is a specialist in factoring and is a member of the Spanish Factoring Association and the Portuguese Association of Leasing, Factoring, and Renting. Factoring allows companies to sell their accounts receivable to a third-party financial entity, improving their immediate liquidity. Kaizen Consulting emphasizes that this mechanism not only accelerates cash flows but also reduces the risk of non-payment by transferring it to the financial entity that purchases the accounts receivable.
The article explains how factoring has become a viable solution for organizations interacting with public entities, where payment terms can be extended. Through factoring, these organizations can obtain advance payments for their pending invoices, enabling them to maintain a positive cash flow and better manage their daily operations. In these situations, the importance of choosing a factoring service that offers favorable conditions and continuous support is paramount, as it should be tailored to the specific needs of the client and the business environment.
The use of factoring is not limited to large corporations. Even small and medium-sized enterprises can benefit significantly, especially in contexts where business relationships with public entities are frequent. Implementing strategies of continuous improvement and process optimization, which are pillars of the Kaizen method, complements the use of factoring, ensuring that organizations not only improve their liquidity but also their operational efficiency and market competitiveness.
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