Release cash quickly from unpaid bills.
Invoice finance is a simple and relatively fuss-free way to leverage outstanding invoices and get hold of the money you're owned by your customers.
If you find that 30, 60, 90 or 120 day payment terms are wreaking havoc with your cash flow, or slow payers are putting undue pressure on your finances, it could be time to set up an invoice finance agreement with a trusted third party.
By signing up with one of our factoring or invoice discounting service providers, you could release up to 100% of the value of your unpaid bills almost immediately. And, as we'll explain below, you could even hand over the task of chasing these payments to the company you decide to partner with.
At Highland Finance, we can help you source invoice finance agreements that are based on securing a loan against your unpaid invoices or relying on a third party to purchase these unsettled bills outright.
The first approach is known as invoice discounting. Take this route, and the discounting firm will process the invoice and verify it with your customer before sending you up to 90% of the invoice's value prior to receiving payment. In a nutshell, you'll get most of the cash you're owed right away.
Your team will need to keep chasing the customer for payment – but when they're ready to make the transfer, you can instruct them to send the funds to a trust account that has been set up in your company's name, ensuring the entire process is completely confidential. From there, you'll receive the remaining balance, less the provider's fee.
If you decide to opt for invoice factoring, your invoice finance provider will pay you the value of your overdue invoices right away (minus their service fees, of course).
When the customer pays your provider the full value of the invoice, the provider will send you the remaining amount.
You won't need to worry about chasing payments or other credit control matters, because it's up to the invoice factoring company to manage this side of things for you. This alone makes invoice factoring a much more sensible choice for smaller companies who don't have the time or resources to dedicate to regular payment chasing.
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You can use both invoice financing methods to reduce the significant impact that late payments or defaulted invoices can have on your business, and release cash in a much more flexible and fuss-free way than if you were to pursue a business loan or take out a company overdraft. It just depends whether you are happy for your customers to know that you are working with an invoice finance provider, or if you would prefer to keep your credit control processes and payment-related communications in-house.