Invoice Factoring and Discounting

Invoice factoring

This form of funding has the benefit of automatically growing as your business grows. It is ideal for many kinds of business including recruitment, manufacturing, wholesale & distribution, transport & logistics, IT and communication providers. The main benefits of this kind of funding are;

  • Improved cash flow, as factoring unlocks the money tied up in your invoices,
  • Up to 90% of the value of your invoices can be released as soon as they are raised. You then receive the remainder when your customer pays the invoice, less agreed fees,
  • The service includes a professional credit control process and there is the option of including bad debt protection.

Most factoring companies have online systems that enable you to submit your invoices for funding, review your account and request money as and when required.

Invoice discounting

Like factoring, this form of funding grows with your business but is generally managed on a confidential basis. This means that you remain in control of your sales ledger. This type of facility suits the same kind of businesses as factoring but does require that you have an established and well-run credit control function, therefore suits businesses with turnover in excess of £500,000. The added benefits of invoice discounting are;

  • Confidentiality, as your customers need never know that you have a facility in place,
  • You retain control of your credit collection process or are free to use an outsourced credit management service as provided by Jack Russell.

Bad debt protection

This service generally works in conjunction with the factoring and invoice discounting arrangements.  It involves credit checking any existing or potential clients and provides up to 100% cover against your customer failing, subject to the insurer’s first loss. Protracted non-payment may also be covered by Bad Debt Protection.

If you would like any further information on these three important topics, please telephone Jack Russell now or contact us on the enquiry form.

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