INTRODUCTION

Invoice finance goes by many different names, factoring, invoice discounting, cash flow finance, invoice factoring and debt factoring. All of these services are a form of invoice finance, although factoring and invoice discounting are slightly different.

For many SMEs outstanding invoices are their largest asset. However, a large percentage of SMEs do not have the resources and information systems to efficiently collect their outstanding invoices. Factoring can be a smart alternative by transferring the debt collection and ledger management to a Factor and almost immediately getting cash advances of between 70 - 90% of the value of an invoice. The cash can be used to reduce your own debt or for investments to grow your business. The outstanding balance is paid to you, less a small service fee, once the factoring company has received payment from your customer. This means your business has access to an ongoing supply of cash linked to your sales. So as your business grows so does the amount of funding available to you.

In addition to the cash that is provided, you can also save valuable management time. The factoring company manage your sales ledger by chasing and collecting outstanding invoice payments from your customers on your behalf, so that you have more time to concentrate on generating new business. They will prepare and send out statements, telephone all your customers, collect payments for you and maintain professional and detailed accounts of your transactions.

You remain in control by working with a dedicated team of people who ensure your customers are as happy to deal with the factoring company as they are with you.