Factoring & Invoice Discounting - Invoice Discounting Guidelines.

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• Invoice Discounting

  Invoice discounting gives you complete authority over your sales ledger and keeps your operations a secret form your customer. (you don't want them to think your business is in crisis). This is the main advantage you get from Confidential invoice discounting' collecting your own debts means that your customers need not know of your invoice discounting agreement .

  How does it work

  You follow the normal procedure of sending out invoices, statements bills etc. Once the invoice discounter receives the copy of an invoice he/she will advance you a percentage of the invoice value keeping some back until the outstanding invoice has been satisfied. On receipt of payment, from your customer a bank account which is under the wing of your invoice discounter must receive that payment. The invoice discounter will then pay the amount retained in the first funding transaction, less any charges of course.

  Requirements

  An annual turnover in excess of £500,000 is usually required before an application will be entertained, and your minimum net worth must be £30,000 and must be running at a profit, profit does not always mean that you working capital balance can be maintained through the month, this is why people use Factoring & invoice discounting as an alternative means of corporate funding.

  Your books may be audited from time to time (usually quarterly) this ensures that your credit control and debt collection procedures are running smoothly and efficiently.

  Non-confidential invoice discounting requirements are usually less intrusive and are accepted more often.

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