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In an increasingly competitive business world, efficient financial management is essential for the success of any business. Among the various strategies available, receivables anticipation emerges as a powerful tool, offering companies an agile and flexible way to optimize cash flow and drive growth.
Therefore, in this article, we will explore in detail what prepayment of receivables is, how it works and what benefits it offers to companies of different sizes and sectors.
Throughout the text, we will address the main aspects of this tool, including its advantages, the different types of operations available, the criteria for its use and the care necessary in its implementation.
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What is prepayment of receivables?
Prepayment of receivables is a financial operation in which a company sells its future credit rights for a lower present value . This process provides companies with immediate access to capital that would otherwise only be received in the future.
Thus, the receivables anticipation market has grown in Brazil, driven by companies' need for working capital and the availability of new financial technologies, which facilitate the carrying out of these operations.
According to data from a survey carried out with businesspeople by Serasa Experience , among the main benefits of anticipating receivables are:
- Better interest rates when compared to other types of access to credit;
- Improvement in cash flow;
- Access to credit without the need for additional debt;
- Greater simplicity in hiring.
Financial technology startups, known as fintechs , have played an important role in this evolution, offering agile and less bureaucratic platforms that directly connect receivable holders to those interested in advance payments.
The most common forms of advance receivables include bills, checks and future credit card contracts. Each one has specific characteristics and conditions that align with different business profiles and needs.
Therefore, the choice to advance receivables must be accompanied by a detailed analysis of the impact on cash flow and the fees involved, to ensure that the decision is aligned with the company's financial strategy.
Types of receivables that can be advanced
Some specific modalities are included in the anticipation of receivables. Check out:
- Invoices: companies can anticipate invoices that are due, transforming installment sales into immediate working capital;
- Duplicates: common in Brazil, sales or service duplicates can be negotiated before their expiration date;
- Checks: companies can present post-dated checks to a financial institution and receive the amount before the clearing date;
- Credit cards: installments of sales made by credit card can be advanced, with the company receiving the amount upfront.
Each type of prepayment of receivables has its own characteristics, and companies must evaluate the conditions offered for prepayment, such as interest rates and terms, in order to improve their cash flow in an efficient and sustainable way.
How the anticipation process works
The receivables anticipation involves several steps, from identifying receivables to receiving payments. Each phase is crucial to ensuring a more efficient financial flow for companies.
Let's look at each of them:
Identification of receivables
Companies start by identifying invoices or duplicates that have future payment deadlines. These receivables represent credit sales that have not yet been settled.
Negotiation with financial institutions
The next step is negotiation with financial institutions. Companies present their receivables to banks or factoring companies to obtain favorable advance conditions. These conditions include the amount to be advanced and the advance period.
Risk assessment
Financial institutions assess the risk associated with receivables, analyzing the payer's credibility and checking payment histories.
Agreement and fees
An agreement is signed between the company and the financial institution, establishing fees (percentages applied to the amount advanced) and fees (operational costs that may be charged for the transaction) for the advance payment.
Advance
The agreed amounts are paid in advance, normally less than the total value of the invoice, due to fees. In other words, the financial institution deposits the amount into the company's account, taking advantage of the discount.
Receiving payments
Finally, when customers pay their invoices, the payment is directed to the financial institution settling the advance transaction.
What are the benefits of prepayment of receivables?
The anticipation of receivables offers significant advantages for the financial health of companies, allowing better management of their resources. The main benefits are detailed below:
Cash flow improvement
The anticipation of receivables provides an immediate inflow of resources, improving cash flow. As a result, companies have greater liquidity to honor commitments or invest in business opportunities.
Reduction of the financial cycle
The financial cycle is reduced, as the company does not need to wait for customers to pay before they have the money in their hands. This speeds up business operations and enhances capital turnover.
Financial flexibility
This mechanism offers flexibility, as the company can choose which and how many receivables it wants to anticipate. This way, you can adapt the injection of resources to your needs without committing to long contracts.
Risk reduction
By anticipating receivables, the company minimizes the risk of default. It transfers credit risk to financial agents, providing greater security in financial planning.
Better relationships with suppliers
With cash resources, negotiations with suppliers can offer more advantages , such as discounts for paying in cash. This can result in better commercial terms and strengthen partnership relationships.
Access to working capital
Access to working capital is crucial for business operations. By advancing receivables, the company is able to obtain the necessary working capital, without increasing its debt or resorting to high-interest loans.
What are the advantages for suppliers?
Anticipating receivables offers a series of benefits to suppliers, allowing greater financial flexibility and more efficient cash management. Among the main advantages, the following stand out:
Improved cash flow
Advancement allows the supplier immediate access to capital that would otherwise be tied up in long-term accounts receivable. This is particularly useful for balancing cash flow and covering urgent operating expenses.
Reduction of financial risks
Opting for advance payment reduces the risk of default, as the supplier receives payments in advance, regardless of any non-compliance by the payer.
Less dependence on bank loans
With capital on hand, suppliers can reduce the need to take out bank loans and, consequently, the costs associated with interest and financial charges.
Improving business relationships
Suppliers with greater liquidity can negotiate better with customers and suppliers, obtaining competitive advantages such as discounts for cash payments or more favorable payment terms.
Greater investment power
Quick access to capital enables investments in the company , whether in expansion, purchasing equipment, or in research and development, without compromising day-to-day operations.
Which companies can benefit from prepayment of receivables?
Companies of different sizes and sectors can use receivables anticipation as a strategic tool to improve cash flow. Therefore, this mechanism is particularly valuable for businesses that have installment sales as a significant portion of their operations.
Market sectors that most use this resource
Business
Companies in the commercial sector, such as retailers, often operate on tight margins and can benefit from bringing forward receivables to meet short-term commitments and take advantage of advantageous inventory purchasing opportunities.
Services
Service providers, especially those with long-term contracts and installment payments, use advance payment to maintain financial balance and invest in training or expansion.
Industry
Manufacturers may need capital for raw materials and may not have immediate liquidity due to long production and sales cycles. The anticipation of receivables helps in managing the operational cycle.
Technology
Startups and technology companies, with business models based on recurring revenue, can accelerate the receipt of future revenue to finance research and development of new products.
Health
Clinics and hospitals, which often face delays in payments from health plans and insurance companies, can use this tool to obtain resources that guarantee continuity of care and investments in infrastructure.
Read more: 5 receivables anticipation strategies to maintain healthy cash flow
Tips for using advance receivables strategically
Receivables anticipation can be a valuable tool for a company's cash flow, as long as it is used in an intelligent and planned manner. Check out specific strategies to optimize your use:
Financial planning
It is essential that companies have solid financial planning, considering short- and long-term cash forecasts. Before opting to advance receivables, you must evaluate the real need for cash and how this fits into strategic planning.
Assessment of costs and fees
Companies must analyze in detail the costs and fees involved in anticipation. It is important to compare the conditions offered by different institutions and fully understand the fees embedded in the operation.
Terms negotiation
Negotiation of terms is extremely important. One approach might include requesting better rates or more flexible terms , based on a strong relationship with the financial institution.
Strategic use of funds
The money obtained in advance must be used for investments that bring a return or to pay off debts with higher interest rates. The use of these resources for non-strategic expenses should be avoided.
Cash flow management
cash flow management is essential. This practice allows the identification of possible gaps that could be filled by adequately advancing receivables.
Risk minimization
Managing the risks associated with anticipation is a critical aspect. The company must have strong credit and collection policies to avoid default, which can significantly increase the cost of the operation if anticipated receivables are not paid by debtors.
Risks and considerations
When evaluating the anticipation of receivables, it is essential to recognize the risks inherent to the process and the possible legal and contractual implications that may arise.
The main risks associated with the anticipation of receivables are:
- Credit risk: there is the possibility of default by the debtor, which may lead to total or partial loss of the anticipated amount;
- Operational risk: errors in the anticipation process may occur, resulting in financial losses or contractual violations.
How to mitigate these risks
Rigorous analysis
detailed credit analysis of the payer of receivables to assess their payment capacity.
Diversification
Do not concentrate large volumes in a single debtor or economic sector to dilute the risk.
Legal and contractual considerations
It is important that companies adhere to legal and contractual obligations when opting to advance receivables. The main points of attention should be:
Normative
The transaction must comply with Central Bank regulatory standards
Contractual clauses
It is important to include clear provisions regarding deadlines, fees, penalties and procedures in cases of default.
Discover the Skyone marketplace
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Have at your disposal a complete ecosystem of credit operations, full of advantages such as:
- Anticipation of receivables;
- Complete supplier portal;
- Scheduling deadlines and payments;
- Relationship in a safe environment;
- Capacity for high transaction volumes.
Skyone marketplace is a solid choice for companies of all sizes looking to streamline their financial operations and take advantage of all the advantages of the receivables anticipation market. Know more!
Conclusion
As we have seen, the anticipation of receivables is a strategic tool for managing companies' cash flow. It enables immediate liquidity and can boost business growth or offer a breather in times of financial tightness.
The conscious use of prepayment of receivables can be a lever for the sustainable development of business activities, especially if done with the support of a reliable platform, such as the Skyone marketplace .
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