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Small to Midsized Factors: Which Software is Right for You?

August 20, 2014, 07:00 AM
Related: Factoring, Software

As a small to mid-size factor one of the most important questions you will have to answer is: Which software system is right for you? A few key aspects to consider in arriving at the correct answer might include….

System Flexibility:

Will the system support the deals I have or expect to have in the future? The right system should have a variety of pricing options that will ensure you can systematically calculate and assess the fees and interest you are targeting.

Will the system give me, my investors, my borrowers, and the debtors everything we need? The honest answer is – no, not everything. However, with proper time and effort spent in evaluating solutions, you should be able to find a system that provides you with most of the key functions needed. 

Upfront and Ongoing Costs:

Is the system, and its license fee, scalable to my current business and staffing levels? Most software vendors offer tiered pricing and functionality to custom fit the lender. The right system should provide options for adding users as you grow along with immediate reduction in overhead, i.e. turning a paper heavy reporting process into a paperless state. Most lenders expect a new system to assist in maintaining reasonable staffing levels with automation of several or labor intensive manual processes – the right system should afford you some of these savings.

Should I run the software in-house or utilize a cloud service? Small to mid-size lenders tend to place staffing resources in income generating positions and find that outsourcing their IT needs to a third party as a safe and cost effective way to manage software and data. The right system should be able to run in either environment.

Ease of Use for Internal and Client Users:

Is the system built with the latest technologies and is it easy for us to use?  The right system must be written in a current programming standard, .NET for example.  Clients, customers, debtors, and investors will all expect certain compatibility with a new system and a .NET technology will ensure this is easily achieved. Now, more than ever, we communicate electronically and stale technology will put you at the back of the line.

Will my staff have to attend extensive training?  The right system should be intuitive to the lender staff.  Training is always helpful but a good system should be intuitive.  The duties of factoring personnel will generally remain the same regardless of the lender, therefore, the right software should be straightforward in its design to allow the staff to navigate and process easily with basic instruction.

Does the system have an option for borrowers to communicate with us?  The right system should have a 2-way portal for you to communicate with your borrowers and vice versa.  Ideally, the borrowers should be able to drop off information, reports, and requests (for funding) to the lender.  In return the lender should provide the borrower with real time data/balances along with current and historical reporting. Consumers and businesses alike have come to expect 24/7/365 access to information – the right system should provide this. 

Vendor Reliability:

Can I trust that the software vendor understands my business and will support me as I grow? The right software vendor may be the most critical partner you have – the vendor should have both depth of knowledge within the finance industry and experienced staff to guide you through system implementation, custom programming design/upgrade, and technology upgrades. Just as you have come to know and understand your borrowers to build a solid and respectful business relationship you should feel you are able to accomplish the same with the software vendor.

Will the vendor be able to help me implement that solution? The right vendor will understand the need to move quickly and assist the lender with questions around hardware requirements and/or communication with the cloud provider. 

Once you have made the decision to replace or upgrade your factoring software you must spend the time and effort to answer these questions. The time you spend exploring the right software solution for your company will more than pay for itself in a smooth transition for all parties and lead to what is typically a partnership measured in decades.

Rosanne Doyle
Product Manager for ABL & Factoring | Solifi
Rosanne Doyle brings to Solifi her experience as a commercial loan executive and project manager. Rosanne managed loan portfolios for factoring clients during her tenure at Bank of America in both their Atlanta and NYC offices. For the last 20 years, she has used her understanding of what lenders' want and need to support the development and deployment of Best-in-Class NovaCS.NET and Stratus factoring systems. Rosanne attended Georgia State University and the Bank of America Credit & Management Training program. Today she lives in the Atlanta suburb of Roswell and enjoys time with her children, traveling, and engaging in child advocacy programs.
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