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What to Look for in a Factoring Service

If you’re the owner of a business that relies on trucks to transport your goods, you know how important the factoring process can be. Most of us, however, have no idea what truck factoring is. But if you’re looking to open a trucking company, understanding the factoring process is crucial to the success of your company.

A friend of mine was talking about hiring a factoring company for her business, and I had no idea what she was talking about. Soon after she explained it to me, I understood how important a factoring company was. I decided to research more about factoring companies for myself. Take a look at what I found and keep reading for tips on what you should look for in a factoring company!

What is the Factoring Process?

The factoring process helps carriers get paid in a timely manner for the goods that they deliver. Truck factoring companies will purchase your unpaid invoices for your customers as a lower rate, giving you cash immediately. This allows you to skip the long process of waiting for the customers to pay their bills — allowing you to grow your business and pay your employees at a faster rate.

Keep reading for a brief, but detailed account of the factoring process:

  • Select the factoring company best suited for you and your company’s needs.
  • Transport the goods for your customers like you would do on a normal basis.
  • Send the invoices you would like factored to your company of choice
  • The factoring company checks the invoices you sent with the customers.

And, finally, receive payment for the invoice in as little as 24 hours.

What Should I Look for?

Now that you’ve learned a bit more about the factoring process, it’s time for you to pick a factoring company that works well for both you and your company. If you’ve never worked with a factoring company before, it can be a bit confusing to know what to look for when shopping around. Hopefully, this list I’ve compiled below will help make the shopping process a bit easier for you and your company!

Timing

The whole point of hiring a factoring company in the first place is to get your cash advance as soon as possible. Any factoring company worth hiring will get you your money in 24 hours or less.

Approval

While some factoring companies will require you to submit an application as well as application fees, many factoring companies do not have such an extensive application process. If you don’t want to pay any application fees, keep in mind that many companies will not require that of you.

Extra features

Many companies have begun to provide their customers with additional features in addition to factoring. Look out for companies that can provide fuel cards, insurance assistance, constant account access, and more. These services can help your company grow to new heights — make sure to take advantage of them if they are available!

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What is the Texas Prompt Pay Act?

Doctors and others in the medical profession is the epitome of excellent public service. For this reason, they need to be paid on time and fairly for all their efforts. Unfortunately, this is not happening as many insurance providers are not giving medical care personnel the compensation they deserve. To keep insurance companies from doing this, the Texas Legislature passed the Texas Prompt Payment Act in 2003.

With the law, those in the medical service who are not fully paid within specific timeframes have the right to recover compensation by filing a Prompt Pay Act claim. Currently, Texas prompt pay provisions take their roots from two legislative laws namely House Bill 610 passed in 1999 and the Senate Bill 418 enacted in 2003. Both provisions have been codified in Article 3.70-3C as well as Chapter 843 of the Texas Insurance Code. So what does the Act provide?

Under the Texas Prompt Pay Act, upon receiving the claim from a medical professional, they are required to perform four basic duties:

  • The insurer must acknowledge receipt of the claim
  • If the acknowledgement is not in written form, the insurance company must record the date of the claim and its contents.
  • The insurance provider must initiate the investigation of the claim
  • The company must request all items, statements and forms that the insurer reasonably believes, at that time, should be presented by the claimant.

The Texas Prompt Pay Act requires insurers to make the necessary payment with 15 days after being notified of the claim. On the fifteenth day, the law requires the insurance company to notify the policyholder of its acceptance or rejection of the claim. The insurance provider is given a 45-day extension.

For rejected claims, the notice of acknowledgement must state the reasons for such. At the same time, if they cannot accept or reject the claim within the specified time, they should inform the claimant that they need more time.

If the insurer uses the 45-day extension, the claim must be rejected or accepted within that time frame. If the company accepts the claim, they must pay within five business days. If some acts of the claimant will be paid conditionally paid by the insurer, the payment should be made within five business days after the performance of the act.

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