The Scope and Importance of Financial servivio Confirming

General, concept, scope

Not surprising therefore that today manifests Comfirming interest on which is a financial service that offers a financial institution to provide its customers with the management of payments of purchases.

José Antonio Almoguera gives us in this connection that the confirming, is to formalize the operations of payments to suppliers of a company through a financial intermediary that assumes the risk of payment of invoices. That is, our suppliers confirm that the payment of our invoices is carried out by a company that is responsible for payment of our invoices once the sale.

Wikipedia gives us respect, confirming that is a financial service that offers a financial institution that facilitates the management customers pay for purchases. Offered to collect the bills prior to the expiration date of these. Its use is common in companies that have diversified their suppliers, who wish to delay payment to suppliers or have a complex payment system. Confirming not confuse with the "payment confirmed" or "debits" lower link in the responsibility for payment by the bank. The equivalent confirming a payment certificate, with the difference that here the bank guarantees payment to the supplier. In fact, a reverse factoring as is initiated by the client and not the supplier. Consequently, in English this service is called Reverse Factoring (and not, as one might think, Confirming).

Confirming attraction for companies

About this indicates lasasesorias.com.es that:

Confirming is attractive to companies that meet one or more of the following characteristics:

- Companies that have diversified their suppliers

- Companies that have complex payment system

- Companies that want to extend the payment period to suppliers, or improve their conditions of purchase

Advantage

Almoguera notes confirming that the advantages are:

Reduce the costs of internal management of payments, especially in companies with a large number of suppliers. Homogenizes the provider payment system. Increased standing with suppliers. Facilitates the reconciliation of control accounts and cash. Avoid the issue of notes, checks and bills of exchange and the manipulation thereof. Avoid incidents that occur in the direct debit receipts. Allows better control and planning of the treasury. Provides immediate funding to providers when an entity offers providers the opportunity to advance.

For its part, lasasesorias.com.es state:

For the company that incorporates this payment management service to its suppliers, the main benefits are:

- Enhance your image with its suppliers to be guaranteed payments for a financial institution

- Avoids costs of issuing promissory notes and checks or drafts handling

- Avoid any incidents that occur in the homes of receipts

- Avoid vendor phone calls to inquire about the status of their invoices

- Prevents tracking different accounts to reconcile the positions of letters, notes or checks

- The company maintains payment initiative

- Get information helpful in the management of shopping

For providers, the benefits they receive confirming service are basically the following:

- They can charge their bills in cash, after deducting financing costs, completely eliminating the risk of default

- Obtain the granting of a credit line without limit and without using their own credit

- Avoiding the payment of stamp, who did not have an impact to its customers by managing collections through transfers or transfers

Remember

Keep in mind as pymesyautonomos.com said that banks tend to improve the financial conditions to those companies who choose to pay through a confirming his, is a very important step in linking with the financial institution. But also, that financial improvement is thickened by the transfer of fees that the Bank usually agree with your client. This will see better from the standpoint of the Bank.

For the Bank, to ensure that a client of his (usually big and good companies) to issue confirmings through it, it's sweet. It ensures a very strong bond with the company, which will centralize their balances there, to be signed by a policy covering the risk for total current payments, etc.. Without wishing to be exhaustive, perhaps the main benefit is that confirming that you close to your customer providers in a very advantageous from the competition. First, it is a document that is not technically a commercial effect, and therefore can not be discounted (and if done, or something similar, we'll see it has its dangers), so its advance in the competition this difficulty. In addition, the issuer ensures confirming the payment. Obviously all this is paid and is generally confirming that substantially more expensive than the best commercial off we can choose to bank competition. We're talking about high rates and relatively strong committees (these are the fees that are partially or fully transferred to the company which is issued confirming).