How does Invoice Discounting Work?
• You raise an invoice as usual. You send a sales daybook listing to the invoice discounter either via the post or, more likely, over an internet link. • The invoice discounter makes available the agreed percentage of the invoice value, up to 120 days old, by electronic transfer with in 24 hours. • You send out statements and chase payments as usual. • The invoice discounter opens a trust account in your company’s name into which you pay all cheques received. Alternatively, you can include the bank details on your invoices and the client can pay directly into the account. • You notify the lender of all deposits as received and he credits you with the balance i.e. less the initial payment and their charges. • The invoice discounter provides monthly bank statements showing all transactions although these details can be accessed by you at any time online.
