Invoice Finance Glossary

The following section details terms which are commonly associated with invoice finance.

If you are looking for a specific term, click one of the following links to go to the relevant section:

A – C |   D – F |   G – M |   N – R |   S – Z

Sales Ledger Management
Sales ledger management is the process of managing the issue and payment of invoices relating to work performed or goods delivered. Such things as credit policy may also be classed as part of sales ledger management. Larger companies may have several employees and whole departments which manage the sales ledger however smaller businesses may choose to outsource the sales ledger management to allow all employees to focus more on the core business.

Shortfall
If the agreement is terminated and the factor is unable to recover advances made to a client, this is referred to as a shortfall.

Trade Finance
Many importers and exporters require a specialist form of finance which offers them the ability to finance raw goods for processing before they then sell on the finished goods.

Finance of this sort is multi-staged and highly structured, often being in place for many months at a time in a revolving line.

Normally this type of finance is referred to as trade finance.

Warranties
Often confused with Guarantees, a warranty defines the proper performance of one party to the agreement and confirms their intention to be bound by it.

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