Before you start dealing with any factoring company, it is important that you conduct a thorough due diligence on the company. You need to understand that the company will be helping to manage a very crucial part of your business; your cash flow. It is thus important that you work with a professional company that understands the sensitivity of eth part of your business it will be handling. Without consistent cash flow, it will not be possible for you to be able to run your day to day operations. If you allow just any company to factor your invoices, you might end up with bigger issues that you initially had and it can even lead to the closure of your business.
First and foremost, you need to deal with a professional company that will not start harassing your customers once the invoices fall due. You might choose to have the factoring company claim what they are owed directly from your customers or have them claim it directly form you as you source it form your customers. Whichever direction you choose to go with, it is imperative that you institute measures to ensure that you customers are handled with the utmost respect. Never at any given moment should the company be allowed to start harassing your customers. This will automatically lead to you losing customers and your business can even end up closing.
You also need to confirm whether or not you are dealing with a legitimate business. The business should be duly registered and properly license to conduct the factoring business. Failure to do this you might find yourself in a situation where you are conned off your money. Remember that the factoring service is not free and there is a certain amount of money that you are required to pay to get the service; the factoring cost. You do not want a situation where you have paid the money but you do not get the money that is owed to you on the invoices.
After all is said and done, the bottom line remains that with invoice factoring it is money that is being dealt with here. Money is a very sensitive issue and thus ethical practices become paramount. The only way you can be sure that the company that you will be dealing with have the ethical standards that are required is if you conduct that very thorough background check on the company.