As a small business factoring can be an ideal solution for your working capital requirements. Factoring does not require you to be well established or even profitable. To qualify for a factoring facility it is more important that your business has the right processes in place, is in a suitable sector and has good quality customers.

Processes

A small business needs to ensure that it’s invoicing procedure is suitable for invoice finance. This means you should create a good audit trail. Agood audit trail for a factoring facility will differ from business to business. For a wholesaler it will include a purchase order, a proof of delivery and an invoice raised in arrears of the delivery. A temporary recruitment company will have a signed agreement, signed time sheets and then invoices submitted on the back of those timesheets. The key is to prove that your product or service was requested, prove that is was delivered to the satisfaction of the customer and as already described that the invoice is then submitted in arrears of the service or product being provided.