Invoice factoring and invoice financing allows you to get your invoices paid before your customer pays the invoice.  This is normally done by you sending the invoice to your invoice factoring company and then they will pay a proportion of that invoice – sometimes up to 85% of the invoice value, and normally within a few working days. It is then up to the invoice factoring company to collect the payment for that invoice. When your customer pays the invoice, the invoice finance company will pay the balance to you. Invoice factoring is also known as invoice discounting, invoice finance or export factoring.

1. No more waiting 60 days to get invoices paid – Reducing the strain on your cash flow.
2. Fund increasing sales by freeing up cash tied up in your sales ledger.
3. Avoid the hidden costs of providing extended credit to your customers.

Five points to consider on why you may need Invoice Financing.

1. A business giving credit to trade customers can typically expect to write-off 1% of turnover as a result of bad-debt (Source HSBC). Let your chosen invoice factoring company chase your debts.
2. By freeing up cash, you may be able to pay your suppliers quicker – allowing you to negotiate a discount with your suppliers.
3. Gives you more time to find new business rather than chase old invoices.
4. If you know when you are going to get paid you can do better financial planning and produce accurate projections.

Invoice Factoring is typically of interest to:

1. Companies looking to expand in to exporting and who need to compete with local suppliers.
2. Companies with a turnover greater than £100k, and who invoice on trade credit terms after supplying the goods or services.
3. Companies with low levels or disputed invoices.
4. Companies who need to expand their business, and regularly have outstanding invoices that could fund that expansion.

1. Review your current circumstances
   1. Do you regularly have outstanding invoices?
   2. Could you put the cash tied up in to your outstanding invoices to better use?
2. Think about your future
   1. Will better cash flow help you plan?
   2. Can you be more profitable by negotiating better discounts with your suppliers?
3. Call for no-commitment advice