Choose an Invoice Financier who maximises your business cashflow

Committing to an invoice finance facility to improve your cashflow and fund your business plans is an increasingly popular choice.  There are many things to consider when choosing an invoice financier but one of the most important is how much funding will you be able to access.

On the surface it seems straightforward – you may be told by your funder that you will be able to access between 70% and 90% of the invoice value sometimes they will quote up to 100%.  However, the devil is always in the detail, and this may affect how much funding you actually receive.

It’s important then that you gather as much information as you can to ensure you are aware of how the invoice financier is working to maximise your business cashflow.  So, when you’re evaluating invoice finance providers, ask these crucial questions:

1. How much funding am I able to access? What is the advance rate and are there any exclusions or limitations such as “high involvement” levels” that you need to be aware of.
2. How proactive are you in reducing my DSO? Do they offer credit control support? Do they provide regular reports on collection performance? What are their current average DSO and Aged Debt disapproval rates?
3. What is your approach to collections? Do they have a dedicated collections team working on your account? How do they communicate with your customers – email, phone, etc? Do they actually chase ALL of your outstanding debts? Do they understand your valued customer relationships and treat them professionally, with respect?
4. What technology do you use? Does their platform give you visibility into the collection progress? Can you easily see which invoices are outstanding and why?
5. How do you handle disputes? A good financier will have a clear process for managing customer disputes, ensuring they don’t unnecessarily delay payment.
6. What is your communication like? Will you be kept informed about the collection status of your invoices?

Having all the information to hand enables you to compare invoice financiers to ensure you are making the right choice for your business.

Link to further reading

Funding levels – the be all and end all?