Invoice Factoring has become more acceptable in Ireland as business owners recognise that it is reliable solution that can help their business grow and thrive. It allows you to maximise cash flow by releasing up to 85% cash against outstanding invoices. This gives your business a valuable cash injection, allowing you to meet daily expenses. The factoring company will take over the credit management and debt collection, saving you the hassle of chasing your customers for payment.
How does Invoice Factoring work?
It works in a very simple way. You raise an invoice to your debtor and send a copy invoice to the funder. The factoring company will pay you up to 85% of the invoice value, within 24 hours. They will collect payments from your customers and manage the credit control on your behalf. Once your customer pays, you will receive the remaining balance (15%) , less any agreed charges.
What are the benefits?
- An instant cash boost. Factoring receivables gives your business the benefit of immediate cash.
- Save valuable time. By outsourcing the sales ledger function you save management time and staff costs.
- Flexible. It’s far more flexible than an overdraft – as funding can increase in line with your turnover.
- Better cashflow management. With a smoother cash flow, you can focus on running your business more efficiently.
- It’s cost-effective. With access to cash you can negotiate better prices, discounts and even reduce bank charges.
- Improve credit limits. By paying suppliers promptly, your suppliers may offer you better credit terms.
How much does Invoice Factoring cost?
Invoice Factoring suits companies with a turnover in excess of €100K per annum. The fees vary, depending on the funder and the facility you choose. We can explain all the fees and charges to you, to make sure you are fully aware of all the costs involved.
Which type is right for me?
- Full Invoice factoring –based on whole turnover, the funder manages the credit control and collections.
- Selective factoring – you choose which customers you want to fund.
- Confidential Invoice factoring – the funder does the credit control and collections on a confidential basis.
- CHOCS – (Client Handles Own Credit Control) – you manage the credit control, your customers pay the funder.
- Non-recourse factoring – Bad Debt Protection is included in the facility.
- Export factoring – release cash from your export invoices.
What’s the next step?
If you are looking for the best Invoice Factoring deal, whatever your situation, call our experts today and find out how we can help you.