The Difference Between Invoice Discounting and Factoring
As one of the more prominent factoring and invoice discounting providers in the UK, Close Invoice Finance takes the lead in providing reliable and quality services across different industries. When contemplating contracting such services, it would be highly beneficial to take time to understand the key concepts, such as knowing the difference between invoice discounting and factoring.
In this article, Close Invoice Finance provides you with some relevant information to help make informed decisions when it comes to what specific services with which to avail yourself of.
Invoice discounting and factoring are two types of financial services, which allow businesses to release funds tied up in unpaid invoices. They both involve a third party company advancing the money against the outstanding debtor balances. Below are some important concepts to help you better understand the key difference between the two.
With factoring, the third party company will take control of the sales ledger and liaise with the customers for the settlement of the unpaid invoices. They are also responsible for managing the credit control of the business as well as in the processing of the payment of invoices. This means your customers are made aware of your contract with the factoring company.
Alternatively, with invoice discounting, the service is confidential and customers are not informed of your relationship with any financing firms you decide to contract. You retain full responsibility of the sales ledger, invoice processing and the credit control function.
Both services are offered by Close Invoice Finance.
Key benefits
While invoice discounting and factoring have significant differences, both share the same benefits, which include:
€ The release of up to 95% of the value of outstanding invoices
€ Reduction of cash flow problems
€ Funding is secured without the need for other assets
€ Increased funding levels
€ Sound financial advice from service providers
Perhaps one edge of factoring over invoice discounting is the handing-over of credit control to a third party, which will liberate you to focus upon more important aspects of running and growing your business.
Who can benefit from invoice discounting and factoring?
Many industries have recognised the benefits of these financial services, such as:
€ Construction
€ Manufacturing
€ Printers
€ Recruitment
€ Couriers
€ Wholesalers
If you are dealing with problems of slow or delinquent payments, factoring and invoice discounting can help you resolve them. When considering which of the two would be best for your business, you should take into account the size of your business as well as the management resources of the sales ledger.
All the aforementioned benefits can be fully enjoyed if you are able to find a reliable service provider that has established itself as a reputable entity. For this reason, extra caution and due diligence should be exercised in your decision. Close Invoice Finance has managed to establish itself as one of the leading service providers in the UK today. Take the first step of making an enquiry and determine the right solution for your business.
In this article, Close Invoice Finance provides you with some relevant information to help make informed decisions when it comes to what specific services with which to avail yourself of.
Invoice discounting and factoring are two types of financial services, which allow businesses to release funds tied up in unpaid invoices. They both involve a third party company advancing the money against the outstanding debtor balances. Below are some important concepts to help you better understand the key difference between the two.
With factoring, the third party company will take control of the sales ledger and liaise with the customers for the settlement of the unpaid invoices. They are also responsible for managing the credit control of the business as well as in the processing of the payment of invoices. This means your customers are made aware of your contract with the factoring company.
Alternatively, with invoice discounting, the service is confidential and customers are not informed of your relationship with any financing firms you decide to contract. You retain full responsibility of the sales ledger, invoice processing and the credit control function.
Both services are offered by Close Invoice Finance.
Key benefits
While invoice discounting and factoring have significant differences, both share the same benefits, which include:
€ The release of up to 95% of the value of outstanding invoices
€ Reduction of cash flow problems
€ Funding is secured without the need for other assets
€ Increased funding levels
€ Sound financial advice from service providers
Perhaps one edge of factoring over invoice discounting is the handing-over of credit control to a third party, which will liberate you to focus upon more important aspects of running and growing your business.
Who can benefit from invoice discounting and factoring?
Many industries have recognised the benefits of these financial services, such as:
€ Construction
€ Manufacturing
€ Printers
€ Recruitment
€ Couriers
€ Wholesalers
If you are dealing with problems of slow or delinquent payments, factoring and invoice discounting can help you resolve them. When considering which of the two would be best for your business, you should take into account the size of your business as well as the management resources of the sales ledger.
All the aforementioned benefits can be fully enjoyed if you are able to find a reliable service provider that has established itself as a reputable entity. For this reason, extra caution and due diligence should be exercised in your decision. Close Invoice Finance has managed to establish itself as one of the leading service providers in the UK today. Take the first step of making an enquiry and determine the right solution for your business.
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