![]() ![]() The company that has purchased the goods or services is given an invoice with the total amount due and the due date. Often, when businesses sell goods or services to wholesalers or retailers, they do so on credit, meaning customers don’t need to pay straight away. In turn you pay interest - called a ‘discount charge’ - to the finance company and typically a service charge, based on turnover. You get a percentage of the total value of the invoice (often around 85 per cent) and then the remainder when the invoice is paid. With factoring, a finance company essentially manages your sales ledger and collects the money your customers owe you against outstanding invoices. There are two main kinds of invoice finance: Invoice factoring and invoice discounting. Tell me more about invoice finance, invoice factoring and invoice discounting. With invoice finance you “sell” your outstanding invoices to a third party, who will advance you 80-85% of the money owed with the rest coming when the invoices get paid. Pay invoices, but you could do with the money now. Let me guess: you need finance for some reason but you’re stuck waiting for customers to pay invoices? We should have a talk about invoice finance, another popular alternative funding model for small businesses. My cash flow is not as good as it could be Discover all you need to know about invoice finance, factoring and discounting, how you can improve your cash flow and keep your business finances on track. ![]()
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