More on factoring receivables 2

The services provided by accounts receivables factoring companies include administration of invoices and receivables (for instance reports as to which debtors have paid their invoices can be provided to the business), credit checking (as accounts receivables factoring companies usually have better access to credit checking facilities), debt chasing (accounts receivables factoring companies can chase debtors who do not pay within the period specified within the terms of sale) and insurance against debtors who do not pay (if they take on the risk of non-payment). Learn more about invoice factoring via the start page.



Of course some businesses do not want some or all of these services. Every business is different. For some businesses the ability to hand over some of the administration to a factoring company will be extremely attractive allowing the business to focus on the services it provides. Other business owners may be very wary of handing over the debt chasing aspect over to a factoring company or even notifying the customers of the business that the debt is now owed to the factoring company instead of the business. Some customers do not understand and are uncomfortable with the factoring business.

Invoice discounting factoring

Invoice discounting is very similar to accounts receivables factoring with some key differences. The customers are not made aware of the arrangement in the case of invoice discounting. It follows that the invoice discounting company will not chase unpaid invoices.



From the advertisements I have seen it appears most invoice discounting factoring companies offer a lower percentage of the value of the invoice upfront (usually around 80%) than they do for invoice discounting factoring services but lower fees overall for instance the service fee may be around 0.1-1% and the interest charge less than overdraft rates