invoice discounting  - a guide to the pitfalls

Invoice discounting is the fastest growing debtor based finance facility in the UK generating a combined turnover in excess of £115billion with huge growth coming from this sector.

An interesting statistic (unfortunately not available) would be how these companies select the invoice discounting company with which to entrust the financial health of their business, as selecting the wrong one could have devastating effects.

It would seem that the majority of  companies using confidential invoice discounting to speed up cash flow take the simplest route and sign up with the subsidiary of their clearing bank (approx 70%) without first establishing whether or not there are more suitable options available.

The rest entrust their company's financial well being to a company selected in a variety of ways ranging from looking in Yellow Pages - which is surely why there are so many invoice finance companies beginning with the letter A - to asking their accountant or insurance broker, who's probable knowledge of the industry comes from the salesman who has most recently canvassed him.

It should be straightforward but in reality it isn't and we have very real concerns with the way that some factoring and discounting companies operate which is why we have set out details of the possible pitfalls in the following pages. The poor level of sales ledger and credit control service offered by some factors is well known but unfortunately opting for confidential invoice discounting can still leave a company open to problems as you will find out if you take the time to read the next few pages

Please see the next page for details on selecting the invoice discounting company

Invoice Discounting UK 
5 Torridge
Tamworth
Staffs
B77 5QL

Tel : 01827 707680