Invoice discounting or factoring: what’s the difference?
The majority of businesses will find themselves at one time or another in need of short term finance.
There’s often a gap between finishing a job and when you can send an invoice, let alone when you receive payment and if one business is late in receiving payment, this will often cause a ripple effect throughout the chain.
Here, Clear Vision Financial Management, based in Romsey, Hampshire, highlights the differentiating points between invoice discounting and factoring.
Invoice discounting vs. Invoice factoring
In both cases with invoice discounting and invoice factoring, you’re effectively selling an outstanding invoice to a third-party finance company.
Invoice discounting is often referred to as ‘confidential invoice discounting’. This is because you continue to deal with your contacts as you usually would and carry on with chasing any outstanding invoices, meaning that they wouldn’t be aware that you’re using a finance facility.
Invoice factoring, on the other hand, is a slightly more direct approach, as your chosen finance provider will take over the process of chasing any invoices from your contacts.
Financial management company in Romsey, Hampshire
Friendly, open and communicative, Clear Vision provides a personal and transparent service to all of our clients. We understand the unique financial needs of each individual and offer tailored solutions that tackle their concerns and enable them to plan for the future. If you’d like more information, visit our website www.cv-fm.com, email us on email@example.com or call us on + 44 (0) 1794 330025.