Factoring can take the worry away from invoicing
Invoicing is such an important part of your business records and it is important to get the invoicing right so that invoices get paid on time. An invoice not only shows the customer or client how much money is due but provides tax and accountancy information.
Getting an invoicing system and payment terms right is the key to a healthy business. A business needs to make sure its customers understand how much they need to pay and when they must settle up. Customer and clients are more likely to pay you on time if these terms are clearly set out in writing from the start.
Once the invoicing has been done a business relies on receiving the money as quickly as possible. The problem is businesses often take too long to pay and this can cause a real bottleneck for a business if it need cash to finance the working capital needs of a business.
How can factoring help?
Factoring is a method where one company purchases a debt or invoice from another company. It refers to the acquisition of accounts receivable, which are discounted in order to allow the buyer to make a profit upon collection of monies owed. Factoring transfers ownership of such accounts to another party that then works vigorously to collect the debt. Factoring and invoicing can work together to make cashflow more predicable and reliable.
The process of factoring invoicing for small businesses
- The factoring company visits your business premises and inspects your invoicing.
- The factoring audit will be looking at which customers you are invoicing and how many customers you are invoicing.
- Most factoring companies will factor a business that is only invoicing a few clients as long as those customers are credit worthy.
- From experience have found that businesses who's invoicing is decreasing may be declined a factoring invoicing facility.
- If accepted for a factoring facility a credit limit will be offered to cover te invoicing needs.
Get factoring and invoicing help today by calling 0800 597 4757 or apply online
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The UK Factoring & Invoice Discounting Helpline is a leading finance brokerage specialising in factoring and invoice discounting. We offer free, independent and impartial advice on business finance options. We have been helping businesses of all sizes and commercial sectors solve cashflow problems for more that 10 years. We have found factoring and invoice discounting facilities for many thousands of businesses and remain in contact with all our clients.