How to get your business invoices paid quickly
Why you should consider invoice discounting or invoice factoring
Making sure you get paid on time can make all the difference - whether you're just starting out or on a planned course of growth and development. It's often hard to dedicate enough time to chasing money and bad debt when you're busy with day-to-day business. So if you're finding your debtor days slipping, or just need to know that your cash flow will not start to become a problem, invoice discounting or invoice factoring may be an answer.
This form of finance, known as asset based finance, has become more popular in recent years. Figures from the Asset Based Finance Association (ABFA) show that advances for the first half of 2008 increased by 15% compared with traditional funding to private non-financial organisations which grew by just 13.2 per cent over the same period. To give an idea of scale, the industry advanced over £17.3 billion against invoices, stock, property and other trading assets worth a total of £31.2 billion from January to June 2008.
Get an invoice factoring quote online now
What is invoice factoring?
If you do not have the resources and information systems in place to efficiently collect payment for your business invoices you could consider invoice factoring. Invoice factoring is where the debt collection and ledger management are transferred to a factoring services company. Factoring services companies could be a division within a bank or large financial institution, or a small to medium-sized independently owned company.
The factoring services company will fully manage your sales ledger and provide you with credit control and collection services for all your outstanding debts. Your business invoices are sent to the factor who will pay you between 80 and 90% of the business invoice amount within an agreed time frame (can be as little as 24 hours). When your customer pays the invoice the factor will deduct their charges, usually a % service charge based on invoice value plus interest on the money already paid to you, before making a final balancing payment to you. Bad debt provision is sometimes available but will incur additional charges.
Get an invoice factoring quote now
The difference between invoice factoring and invoice discounting
Invoice discounting is similar to invoice factoring except that you remain responsible for collecting payments from your customers. The advantage is that you maintain the relationship and contact with your customers yet still receive guaranteed payment, within an agreed time frame, for the business invoices that you raise. The real disadvantage is that you do not receive 100% of the invoice value due to the factor’s charges.
Get an invoice discounting quote from Lloyds TSB Commercial Finance
How to get your business invoices paid quickly
Why you should consider invoice discounting or invoice factoring
Making sure you get paid on time can make all the difference - whether you're just starting out or on a planned course of growth and development. It's often hard to dedicate enough time to chasing money and bad debt when you're busy with day-to-day business. So if you're finding your debtor days slipping, or just need to know that your cash flow will not start to become a problem, invoice discounting or invoice factoring may be an answer.
This form of finance, known as asset based finance, has become more popular in recent years. Figures from the Asset Based Finance Association (ABFA) show that advances for the first half of 2008 increased by 15% compared with traditional funding to private non-financial organisations which grew by just 13.2 per cent over the same period. To give an idea of scale, the industry advanced over £17.3 billion against invoices, stock, property and other trading assets worth a total of £31.2 billion from January to June 2008.
Get an invoice factoring quote online now
What is invoice factoring?
If you do not have the resources and information systems in place to efficiently collect payment for your business invoices you could consider invoice factoring. Invoice factoring is where the debt collection and ledger management are transferred to a factoring services company. Factoring services companies could be a division within a bank or large financial institution, or a small to medium-sized independently owned company.
The factoring services company will fully manage your sales ledger and provide you with credit control and collection services for all your outstanding debts. Your business invoices are sent to the factor who will pay you between 80 and 90% of the business invoice amount within an agreed time frame (can be as little as 24 hours). When your customer pays the invoice the factor will deduct their charges, usually a % service charge based on invoice value plus interest on the money already paid to you, before making a final balancing payment to you. Bad debt provision is sometimes available but will incur additional charges.
Get an invoice factoring quote now
The difference between invoice factoring and invoice discounting
Invoice discounting is similar to invoice factoring except that you remain responsible for collecting payments from your customers. The advantage is that you maintain the relationship and contact with your customers yet still receive guaranteed payment, within an agreed time frame, for the business invoices that you raise. The real disadvantage is that you do not receive 100% of the invoice value due to the factor’s charges.
Get an invoice discounting quote from Lloyds TSB Commercial Finance