Invoice factoring paid

Invoice factoring can help you get paid and free up time

Published On November 8, 2015 | By Layne Grady | Finance

Do you need to unlock the value in unpaid invoices as soon as possible? Then invoice factoring or invoice discounting could be for you. Invoice discounting involves essentially selling your invoice to a finance company who then becomes responsible for chasing it up themselves. If you don’t mind your client knowing you have used an invoice finance company, factoring may well be for you. You’ll usually be able to get access to around 85-90% of the value of your invoice within around 24 hours, allowing you to access the funds you need to keep growing your business quickly.

Pick the right option for you

Invoice discounting may be the option for you if you don’t want your client to know you’ve been working with an invoice finance company and are happy to chase up the money yourself. This option may also be ideal if your invoice isn’t overdue but you simply need to raise cash quickly. You can usually borrow around 85-90% of what your invoice is worth and settle up your debt to the finance company once the invoice has been paid. You may risk offending your client if they find out you are using a finance company to get the money, so if the client in question is a valuable one you plan on doing more business with in future, invoice discounting may be the right choice.

Which company should I choose?

If you simply cannot wait any longer for your invoice to be paid and need to boost your cash flow as soon as possible, invoice financing could be worth its weight in gold. It’s wise to talk to around 3-4 different companies so you can come to an informed decision on who to work with. You may even wish to look online for reviews of invoice finance companies before you make your choice.

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