Why Completing the IFA’s 2023 Factoring Survey is Critical to Industry’s Future

Success in any business depends on controlling expenses, leading personnel, employing the right technology and managing cash flow. All of these factors can be enhanced by gaining the ability to compare your firm to other similar companies.

To help its members evaluate these factors and take stock of where the overall factoring industry currently stands, the International Factoring Association is conducting its biannual factoring industry survey. Participants of the survey receive the complete results (a $600 value) at no charge and a personalized report showing their responses alongside aggregate results of companies that closely match their own company.

Furthermore, participating in the survey provides valuable data that many stakeholders, such as lawmakers, lenders and vendors, need in order to make informed decisions that affect the factoring industry.

The survey can be completed online at factoringsurvey.com or manually by sending the completed questionnaire to Sophia Rizzi of Industry Insights at PO Box 4330, Dublin, OH, 43016. The deadline for submission has been extended to April 1.

Tania Daniel, executive director of the IFA, spoke with Commercial Factor to outline the many benefits of the survey, what participants can expect to gain from the results and how the IFA designed this year’s survey to be as easy to complete and secure as possible.

Why should a factoring company participate in the survey?

Tania Daniel: There is no better measure of performance than to see how your business practices compare to others in the industry.  Likewise, there is no bigger goal of our community than to provide accurate information about factoring to stakeholders outside of the industry. When a factor participates, not only do they receive the results of the survey at no charge, but they are contributing to the overall health of the factoring industry. Stakeholders such as lawmakers and investors want to learn more about factoring, and participating in the survey helps to provide valuable educational materials along with historical data and statistics that can be used to shape the future of factoring.

In addition to the individual benefit each factor receives from the survey, banks use it to improve their lender’s funding products for factors, and the American Factoring Association uses the comprehensive report on Capitol Hill to educate policymakers. With the looming regulatory concerns facing factors, it is imperative that now, more than ever, everyone participates in the survey and contributes to the overall wellbeing of the factoring industry.

Why is this such a valuable report for factoring companies? 

Daniel: The report is valuable because it provides the insight needed to stay up to date and competitive within this ever-changing market. While many of our members are independent, entrepreneurial businesses, there are more banks and private equity firms getting involved in the space and we are seeing increased consolidation. As that happens, it effects the way factors may manage personnel, control expenses, obtain funding and employ technology. The survey results allow our members to stay on top of evolving industry dynamics to make more informed decisions on items that directly affect the health of their factoring company.

What are some of the most important takeaways the survey will provide to those who access it?

Daniel: All the data is relevant and there are takeaways for every factor regardless of where they are in their life cycle or what industry they focus on. For newer factors, there is info that can help guide them on best practices, such as loss reserve as a percentage of net funds employed and the most common frauds currently in the market. For those looking to grow, there is feedback around the other types of funding factors are offering their clients and the most effective factoring referral sources. There are also key operating metrics, like average DSO and pre-tax net profit margin, that are good overall health checks for every factor. The survey also captures info on employee-related data, technology trends and so much more. There really is something relevant for everyone in this survey.

Are there other organizations that can benefit from the data in this report? If so, what are they and how can they benefit?

Daniel: While the survey results are critical for factors, they can be equally beneficial for IFA vendors, lawmakers bankers and any group curious about learning about the factoring industry. The information provided can better help our vendors continue to customize their products and services to the needs of factors, allow lawmakers to learn critical data about factors prior to putting in place legislation that can affect our members, and provide a resource to anyone interested in starting or investing into a factoring company. This is an exciting opportunity for factors to provide information that can help to shape the entire industry.

How is the survey being conducted to ensure complete confidentiality? 

Daniel: Since 2007, the IFA has employed the services of Industry Insights, an independent, highly reputable survey research firm. Industry Insights specializes in providing high-quality survey research services which assist organizations in better fulfilling the informational and educational needs of their members. Neither the IFA, our members, nor our vendors will have access to the completed surveys, only Industry Insights. This has been proven to ensure complete confidentiality.

Have there been any changes made to the survey since the last one? If so, what has changed? If not, why was it kept the same? 

Daniel: While we want to capture as much information as possible, that information is only valuable if we have enough factors participating. Therefore, with the help of our advisory board, the IFA streamlined the questions to make it easier and quicker to complete in order to increase participation. We hope that factors see the value in spending 30 minutes to complete the survey before the deadline of March 17 to receive this valuable information complimentarily, and to help provide market education.

How does this survey fit into the IFA’s overall mission to educate and provide value to the factoring community? 

Daniel: The IFA exists to add value to our members and the factoring community, and the analytics that are provided on the comprehensive report is an important step in that process.  Some of the ways the IFA provides education is through training classes, webinars and conferences; the survey is a way for factors to learn from each other and to provide insight to factoring stakeholders, such as the IFA, that can be used to fine tune and streamline the products, services and market education that currently exists.