Selecting or choosing an invoice discounting company

Selecting or choosing an invoice discounting company

There can be several reasons for which a business might look to invoice discounting. Your business might have an interest in expanding it sales base and wants to avoid overtrading.

Just have a look at the tips given here to get some guidance and make sure that you make a choice of the most appropriate invoice discounting option for your business.

  • In the UK there are several firms of invoice discounting firms to choose from. Some are subsidiaries of major banks and financial institutions, others are independent.
  • Please note that whoever you select or choose to work with you can expect to work closely with your invoice finance provider, so make sure you make an informed choice.

Areas to discuss prior to selecting or choosing an invoice discounting company

It is vitally important that you spend some time ensuring that you make the right choice

  • Check the cancellation clauses as some invoice discounting firms expect businesses to sign up for 12-24 months.
  • Check what percentage the invoice discounting form will advance. The higher, the better.
  • Read the invoice discounters terms and conditions carefully before signing up.
  • Check all the charges associated with each provider because invoice discounting charges will vary between invoice discounting companies.
  • Does the invoice discounting firm charge a daily, weekly or monthly service fee to maintain your ledger.
  • What interest charges are involved. Make sure you read and understand all the charges.
  • Don’t always choose or select the least expensive invoice discounting company because a cheaper facility may mean a poorer invoice discounting service.
  • When it comes to choosing an invoice finance provider you should enquire whether the invoice discounting firm has any experience in a particular business sector or industry.
  • Check and compare various invoice discounters minimum turnover requirements.
  • Check and compare various invoice discounters policies on whether they place restrictions on the proportion of invoices raised.
  • Check and compare various invoice discounters they have a minimum debtor concentration lever

What to look for while selecting a invoice discounting company seems like a simple question and there can be so many answers to this question. So many things can be considered and some of them are mentioned here. Please call 0800 597 4757 or apply online for guidance on which invoice discounting company to choose.