Invoice factoring gives you the cash flow finance and debt management solution that your company needs to succeed. It provides you with immediate cash advances from funds already owed to you by your customers (debtors), thus increasing your working capital. Factoring companies will typically provide an initial cash advance up to 90% of the value of outstanding invoice. The factoring agreement will also provide an ongoing facility that increases in line with the volume of sales and values of invoices you issue.

You send out your invoices including an assignment notice and credit notes as normal providing a copy by post or electronically to the factoring company.

The factoring company sends out monthly statements and ensures payment is received on time, having agreed a credit control strategy with you beforehand. This allows you to catch up with some of your more important customers ensuring goodwill is maintained with them whilst still collecting the money in good time.
Your customers send their payments to the factor who in turn then credit you with the balance due.
The sales ledger is updated on a monthly basis by the factoring company.
Regular management reports are provided by the factoring company giving details of the sales ledger and your account with them.