Invoice Factoring

What is Invoice Factoring?

Invoice factoring, also known as invoice finance, advances up to 90% of funds against the value of outstanding invoices, within 24 hours. Essentially, it supports cash flow in a business while payments are pending.

There are three parties involved in the invoice factoring process:

How does Invoice Factoring work?

As an example, your business has an outstanding invoice for £10,000 from your customer. Their payment terms are 30 days from date of invoice issue. Within that 30-day window there is no guarantee when your company will receive payment.

Many small businesses don’t have the capacity to go 30 days without payment and require these funds right away. This is where invoice factoring comes in.

Simple Steps to Invoice Factoring:

As standard, 亚洲黄色图片_男女做爰视频免费 credit check your customers to ensure you are working with the best possible debtors to support your business. We can also support you with our in-house credit control to follow up with your customers and ensure that their invoices are paid.

For a step-by-step breakdown of the process please watch our video.

Invoice Finance process at 亚洲黄色图片_男女做爰视频免费.

Could Invoice Factoring be Right for My Business?

Invoice Factoring has many advantages for companies using this method: the most obvious being a stabilised cash flow.

If your business regularly experiences cashflow deficits, whether due to seasonal products or services, or the initial expense of raw materials, equipment, or wages, then invoice factoring can be an effective and reliable way to provide financial flexibility and stability.

Typical invoice factoring agreements will have the factoring provider take responsibility for the management of all company invoices for a fixed period of time. This means that as well as providing your company with potential advances on all invoices, they can also perform all customer credit checks and take on credit control duties.

Having the factoring provider responsible for credit control; chasing up customers on any outstanding invoices, allows your business to spend less time and energy doing this itself. This means you can concentrate on providing the product or service that you are paid for, and not worry about when these payments will be made.

It’s important to keep in mind that having a ‘third party’ chase up payments has a potential impact on your relationship with customers. You should research the skill and reputation of the factoring company, and consider if invoice factoring is the right financing option for you.   

At 亚洲黄色图片_男女做爰视频免费, we understand the importance of relationships and the need for flexibility in business. If you’re interested in invoice factoring but unsure if your business meets the requirements, please get in touch with us today. We’ll tell you quickly and honestly if this type of finance is right for you.

If you think Invoice Factoring may not be the right option for you, Calverton have other finance solutions that may work for you such as Confidential Invoice Discounting, and Selective Invoice Finance.

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