Invoice Factoring - Advice and Online Quotes
Invoice Factoring is a way of giving your business the funding needed to trade, based on your sales rather than your balance sheet.
Invoice Factoring helps you to maintain a healthy commercial relationship with your customers. By outsourcing the credit management function to a factoring company, you can provide your service or product without the uncertainty of wondering if your new customer will be able to meet your payment terms.
Invoice Factoring Benefits
- Up to 90% of an invoice’s value can be paid to you the next working day
- The facility grows with your business; no need to keep increasing your overdraft or other borrowing facilities
- Gives you the ability to react quicker to market opportunities, whilst keeping your debtors under control
- You could obtain more favorable terms from suppliers by paying
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How Invoice Factoring Works
Step 1. You deliver goods or provide services to your customer(s).
Step 2. You invoice your customer and send a copy to your Factoring Company (many factoring companies now offer online facilities for this).
Step 3. The Factoring Company makes available to you the agreed prepayment percentage of the invoice value, less an agreed service charge.
Step 4. The Factoring Company collects the outstanding debt from your customer(s).
Step 5. The Factoring Company credits your account, making the balance of your invoice available.
Step 6. On the last day of each month an agreed discount charge is debited to your account based on the level of funding your business has used during that month.
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Also in this section:
- Overview of invoice factoring
- Factoring UK – Who ‘s in the loop and why
- How to find the best factoring quotes
- Benefits of a factoring service
- Factoring invoices is beneficial for young businesses
- The benefits of using business factoring
- Understanding a factoring service
