What is invoice finance?
Invoice finance is the generic term used to describe the products that enables you to unlock the cash tied up in outstanding invoices. There are two main options with invoice finance – invoice discounting, and factoring.
Invoice discounting gives you a set percentage advanced against your outstanding invoices, once the goods are delivered. This is usually confidential and you still handle all the credit control.
Factoring gives you the same as invoice discounting, but gets a little more involved, often handling the credit control and ledger. With factoring, it’s normal for your customers to know you’ve got a facility in place, however some companies are able to operate confidentially.
Remember – it doesn’t have to be all your invoices, many of our clients choose one-off invoices, or pick and choose to make it work for them.
How does invoice finance work?
- Invoice discounting – you retain control of your sales ledger and credit control process.
- Factoring – the provider takes charge of the sales ledger, credit control and chasing of payments.
What are the benefits to invoice finance?
- Oustanding invoices can quickly be turned into cash
- Quite competitively priced
- You can release up to 95% of the value of your outstanding invoices
- A slick and easy process – not much paperwork