Kamogelo's customers have been a little slow in paying their invoices, and he is short on cash to pay his quarterly taxes.Kamogelo should consider:
A)sending the late payers to a collection agency.
B)factoring.
C)putting his late payers on credit hold until they pay up.
D)taking out a personal loan to pay the taxes.

Question

Quizplus · Accepted Answer

Factoring involves selling accounts receivable at a discount to a third-party financial company. This provides immediate cash flow for Kamogelo to cover his quarterly taxes and ongoing business expenses. It also transfers the risk of late payment to the financial company, freeing up Kamogelo's time to focus on other aspects of his business. Sending customers to collections or putting them on credit hold could damage Kamogelo's relationships with his clients, whereas taking out a personal loan may not provide enough immediate cash flow and could put Kamogelo in personal debt.

Kamogelo's Customers Have Been a Little Slow in Paying Their