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Stories Tagged ‘Invoice Discounting’

Invoice finance is now being offered by Investec Capital Solutions. This is after Investec Bank acquired Amicus Commercial Finance from the Amicus Group. Amicus had failed to secure a banking license as expected. As a result, Amicus undertook a strategic review across the group in order to reduce operational costs and ensure that its core short-term property lending business continued to grow. The sale of the invoice finance side of the business was after this failure. It must have been unsettling for staff and clients alike given that Amicus Commercial Finance was only established in 2015.

Invoice finance is typically provided by way of invoice discounting or factoring. It allows a business to access up to 100% of the gross value of outstanding invoices. It is a great source of working capital and smooths cash flow so you don’t need to worry about when customers pay late.

When considering which invoice finance provider to use you should consider 4 main areas:

1. Structure – if the facility is not structured properly it will not generate the cash you expect it to.

2. Pricing – the difference between the most expensive solution and the cheapest can be dramatic. It is also important to look beyond headline rates and consider total costs.

3. Service levels – they way you are treated by a lender is important. You are paying for a service and you deserve the best. Things such as stability, staff turnover and general attitude of the lender can make a big difference.

4. Security – ensure you understand what your liabilties are in terms of security requirements.

If you are looking for a factoring or invoice discounting facility why not undertake a complete market review using the simple 3 step form above. That way you can secure the most competitive terms in the market. Whatever your situation there is likely to be a lender that will meet your needs better than other invoice finance providers.

By using our expertise you can ensure not only that you get the best rates but also the best structure.

 

The permanent recruitment sector has historically been neglected by the invoice finance industry. There was a time when the industry would not finance perm recruitment companies.

So why was the perm recruitment industry neglected?

It was neglected because of the perceived risk involved in dealing with invoices that related to permanent placements. With temporary recruitment the rates are agreed, work is completed, timesheets are signed and invoices are raised. If the hours are multiplied by the agreed rates correctly there is very little that can be queried. In comparison, an invoice for a perm placement is raised when the candidate starts work and sometime before they have even started. What happens if the candidate does not show up on the first day? What happens if they walk out after their first week? What happens if the company finds they are not suitable and let’s the candidate go? Typically there are various rebates due depending on when they part company. As such there is no guarantee that invoices raised will be settled in full if at all.

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Invoice discounting has often been reserved for larger, well established businesses and smaller businesses have been forced to accept invoice factoring.

The good news is that invoice discounting can be accessed by smaller businesses.

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We are often approached for finance by someone starting a new start recruitment business.

New start recruitment companies can range from an individual setting up on their own through to large organisations with ambitious recruitment plans and everything in between. Whatever the size of the business cash flow is key to ensure that contractors wages can be paid on a weekly basis. This is why finance is important.

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Cashflow Finance is currently under construction as a resource to help businesses who are looking for cash flow finance solutions.

The site will be aimed at businesses who are seeking advice about their cash flow finance options.

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Smart Factoring Quotes have updated their new website to include a new and improved quotation tool.

As an independent and impartial invoice finance broker, Smart Factoring Quotes are keen to attract businesses looking for a new finance facility or a business looking to review their existing facility.

The new improved quotation tool takes into account the criteria of your business and provides a quotation that is bespoke to your business.

The quotation tool is also now accessible from each and every page on the website.

Confidential invoice discounting is the ideal invoice finance product for businesses that want to do their own credit control and do not want their customers to know that invoices are being funded. Confidential invoice discounting provides businesses with working capital and will prepay up to 90% of the gross invoice value.

Confidential invoice discounting can however be very hard to come by due to the criteria invoice finance companies put in place.

Lenders look beyond the basic invoice finance criteria of selling to other businesses on credit terms and invoicing in arrears of delivery. Lenders will look more carefully at a businesses financial performance and they expect a robust balance sheet. Equally important are the processes that a business employs to collect in outstanding invoices.

 

For many businesses invoices discounting provides the cash that is needed to ensure that their business can survive. Without the necessary cash they cannot pay employees or suppliers. Customer payment patterns can be erratic and can cause cash flow issues and headaches.

Invoice discounting is typically the cheaper of the invoice finance facilities available to businesses. It can also be confidential meaning your customers are unaware of any lenders involvement.

In terms of qualifying for invoice discounting it really rests on processes rather than financial performance. Don’t get me wrong financial performance is important but without the right processes in place you will not qualify for invoice discounting no matter how profitable you may be.

There are 2 main process that will be looked at. Your invoicing process will be interogated. It is important that a good audit trail exists and that invoices are raised in arrears of delivery.

Your credit control process or procedure is also important to demonstrate that debts are collected methodically and professionally rather than not at all or on an ad hoc basis when you have time.

If your invoicing process is not right it is unlikely any type of invoice finance facility will be made available. If your credit control procedures are not adequate it is likely a factoring facility would be offered rather than an invoice discounting facility.

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