Invoice Finance Broker or Accountant?
When a business owner is looking for impartial advice about invoice factoring should they be asking their accountant or an invoice finance broker?
This relies heavily on the quality and integrity of the parties you are speaking with. In terms of this post I will be making generalisations and will also try to be impartial – I am an invoice finance broker afterall.
Accountants are in a position of trust with their clients. They are well educated and have a good general understanding of accounting procedures and business. Some are mere ‘bean counters’ whereas some are more integral to businesses and offer proactive business advice and planning. In comparison an invoice finance broker is a specialist in the invoice finance industry. All day every day they are looking at different scenarios and the objectives of different business owners with a view to meeting their needs. On that basis I think that a reputable invoice finance broker offers a more specialised and focused service. As such their analysis can be more in depth and their industry contacts should typically be wider than those of an accountant.
Impartiality is an important factor – excuse the pun! An invoice finance broker works for commission so there is a chance they will look to maximise their commission. That said the commissions paid by lenders are fairly standard across the industry. It is also unlikely an invoice finance broker would say ‘You don’t need factoring’. An accountant on the other hand should be totally impartial as they shouldn’t accept the commissions offered by lenders. That is not the case though. I know a multitude of lenders that pay commissions to accountants. Some of them take the commissions and offset them against thye clients fees which is admirable but that is not always the case. As an invoice finance broker I actually share commissions with some accountants so I know where their motivations lie. That said if they are offering advice and helping structure a facility then should they not be entitled to the same commission as an invoice finance broker? I personally have no issue with it but in terms of a comparison it is important to see in many instances the motivations are very similar.
Invoice finance has so many options in terms of providers, facilities and variables I personally feel that expert advice from a reputable broker is invaluable. But the comfort that your accountant gives you because of the trust within the relationship is also invaluable.
On that basis perhaps it is best to use an invoice finance broker to establish your options and importantly the pros and cons of each. Then use your accountant to check the findings and help you decide what is best for your business.
