Selecting An Invoice Discounting Company

Once you’ve decided Invoice Discounting is a good option for your business, how do you go about choosing an Invoice Discounting company? It’s certainly not a decision to be taken lightly, as many providers require a commitment of at least a year, and you may find yourself working very closely with your Invoice Discounter during that time.

The trouble is, every Invoice Discounting company is likely to offer a slightly different product or service. Choosing a provider that’s really right for your business can take a great deal of time and research.

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When considering providers, some of the questions to ask include:

What percentage of invoice value will the Invoice Discounting company advance?

In theory, many providers will pay up to 90% of the invoice value in advance, with the rest payable (less fees and interest) when the invoice is settled. But the actual amount an Invoice Discounting company is prepared to advance to you will also depend on their assessment of your customers and invoices.

How much will the Invoice Discounting company charge?

Invoice Discounting usually involves two different types of cost:

  • A monthly fee for the provider’s service, and
  • Interest on the amount advanced.

But fees and rates of interest can vary quite considerably from one Invoice Discounting company to the next, so price comparison is essential. There are also other charges to be taken into account, such as audit costs and transfer fees. Make sure you get a comprehensive break down from every potential provider. And bear in mind that Invoice Discounting is a competitive market – you can shop around for a good deal.

What terms will the Invoice Discounting company impose on you?

Some providers may wish to impose restrictions on the customers you can accept; or limit the value of invoices. Others may not be willing to offer a service to businesses in which a small number of customers provide a large proportion of the income. Make sure you choose an Invoice Discounting company offering terms that will support the needs of your business.

Is the Invoice Discounting company experienced in your business sector?

Some providers specialise in quite narrow sectors of the industry. Make sure you choose an Invoice Discounting company that is not just familiar with the nature of your business, but has extensive experience working within your sector and can offer genuinely useful advice .

Do you like their business approach?

Would you prefer to have a one-to-one relationship with an account manager? Or are you happy for transactions to be handled online, with little personal contact? Every Invoice Discounting company has a different approach to doing business; check that it suits you.

It costs nothing to get expert help choosing an Invoice Discounting company

Researching the Invoice Discounting market takes time – even if you know exactly what you’re looking for – and there’s a great deal of small print to get through. Getting professional support with choosing an Invoice Discounting company isn’t just a quicker route, it can also ensure you end up with a provider that positively suits your business and plays a active role in its future growth.

Touch Financial offers expert, impartial advice – as independent brokers, our priority is to provide you with the best possible solution to your business challenge (not to sell you any particular product). What’s more, getting the benefit of our experience won’t cost you a penny.

Why not take advantage of a free consultation with one of our experienced team and tell us what you need from an Invoice Discounting company? We can take the legwork out of finding the most suitable Invoice Discounting provider for your business.

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