A business

What the category of business can benefit from invoice discounting?
– A business selling goods on normal trade credit terms (eg net 1 month) – A business using a spread of debtors where nobody debtor is liable for a lot more than 30%- 50% of total debts outstanding – A business trying to find funds to advance a growing amount of sales or where cash flow has affected by debts not being collected effectively. – A business the place where a seasonal demand for the item or service is putting stress on available today financial or administrative resources – A business planning to give full attention to sales and production and where they desire the sales ledger administration to get handled inside a professional and efficient manner
What industries fit invoice discounting?
Invoice discounting will suit many industries including:
– Recruitment / Office Cleaning – i.e. industries in which the debtors take normal credit but where wages have being met promptly following the week or month. – Toys and Electrical Goods – i.e seasonal industries where large amounts of working capital are tied up with debtors before Christmas. – (Steel) Stockholding Businesses – where considerable amounts of working capital are consumed by both stock and debtors. In this case a revolving facility between stock (asset) finance and invoice discounting will maximise send out capability to trade – Clothing and Textiles – i.e. industries where slow payments jeopardise cash flow and financial obligations affect profitability as well as the viability of the business. – Small Engineering Companies – often many successful smaller businesses are severely handicapped by larger more developed customers being slow in investing in goods supplied. – Other Industries include Advertising, Builders Merchants, Chemicals, Plastics, Computers, Furniture, Paper and Printing, Plant Hire, Rubber, Food & Drinks, Timber, Transport & Logistics, Waste Disposal and Wholesale Distribution.
What the category of business may not reap the benefits of invoice discounting?
Invoice discounting is normally not suitable to companies where the collection of the outstanding invoices is complicated by one from the following:
– Contra Trading – Deposits – Retentions – Sale or Return – Stage or Progress Payments – Sales to Individuals – Sales focused on one Customer
Therefore industries that might normally not make use of invoice finance include:
– Building and Construction – Heavy Engineering – Retail businesses