Wilkins Kennedy LLP.

Invoice discounting

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Instant cash flow from invoice discounting.

Manage your cash flow with confidence by turning your debtors into cash.

What is invoice discounting?

Invoice discounting is a proven cash flow finance solution, enabling you to generate the maximum working capital from your sales ledger.  

Your business will receive an instant injection of cash on day one, plus continuous cash flow to fund your on-going business activity. Invoice discounting keeps pace with your rate of growth, so you never have to worry about having constant rounds of renegotiations with your lender.

You assign your unpaid sales invoices to an invoice finance company. Then, within 24 hours of receiving your invoices, they pay around 85% of their value in cash. The remaining balance, less the invoice dicounter's charges, is then made available to you once the debt has been collected.

What is invoice discounting used for?

Typically for day to day cash flow.  Increasingly, invoice discounting is also being used as a strategic funding tool, not only for refinancing but also management buy ins / buy outs and acquisitions. With invoice discounting, you retain complete control over every aspect of your cash flow, from credit management to collections. This confidential cash flow solution ensures your financing arrangements are undisclosed to your customers.

How does invoice discounting work?

A quick review of the invoice discounting process:

Step 1

You assign your unpaid sales invoices to an invoice discounter and within 24 hours they pay you around 85% of the value of the invoices.

Step 2

You retain control of your sales ledger, credit management and collections.

Step 3

Your customers remain unaware that the invoice discounting facility is being used.

Step 4

The remaining invoice balance, less the invoice discounter's charges, is then made available to you once the debt has been collected.

How can invoice discounting help my business?

- Treat your invoices as a tangible asset releasing cash tied up in your unpaid invoices.

- Improve your cash flow by closing the gap between raising an invoice and receiving payment.

- Take advantage of early payment discounts with your suppliers.

- Maintain a healthy cash flow by balancing your cash flow with regular cash inflows.

- Increase your cash flow as your sales grow.

- Identify the early signs of payment problems to minimise bad debts.

What are the costs of invoice discounting?

We will help you tailor the cost of your invoice finance facility to your specific business and requirements. At cash-flow.co.uk we will ensure that the pricing of your facility is transparent and clear.  Typical fees charged by invoice discounters are as follows:

Arrangement Fee - this is a fee charged to cover the due diligence on new clients.

Service Charge Fee - this is a fee that covers the ongoing servicing of your facility and will vary according to the value and volume of invoices you put through the facility.

Discount Charge - this is a percentage charge above the base rate or LIBOR, calculated daily on the money drawn down from your facility.

Legal Costs - this is a cost for putting the facility documentation in place and may include the cost of preparing and registering a legal charge over your business.

The above fees and costs are all subject to negotiation with the invoice discounter. 

We will help you structure a facility that works for your business at the lowest possible cost.

To discover how invoice discounting can help you accelerate your business growth. For a FREE NO OBLIGATION QUOTE simply complete the form or call our cash flow contact centre free of charge on 0800 019 4251 to realise your potential for growth.