Invoice Discounting
Invoice discounting releases cash from your invoices in the same way as factoring however, the lender does not provide any credit management service to help collect your outstanding invoices. The invoice discounting provider will merely release up to 90% of invoice value and you as the client will retain control of the credit management. The remaining 10% is made available when your customers pay.
Why Use Invoice Discounting?
Invoice Discounting allows you to release cash that is tied up in your debtor book. Cash is the life blood of any business and it is imperative that your business has enough cash to survive, thrive and grow. Invoice discounting allows you to maintain control of your debtor book as you will be controlling the credit management. This means that your business will chase up the customers outstanding due payments.
How Does Invoice Discounting Affect Your Customers?
In short is does not affect the way that you deal with your customers. In fact if you operate a confidential invoice discounting facility they will have no idea that a finance company is involved. It allows you to offer your customers the credit terms they expect without impacting on your own cash flow.
Not sure what the stages of invoice discounting involve? Have a look at how discounting works.
