Our Invoice Finance services take three main forms - Invoice Discounting, Reverse Invoice Factoring & Timesheet Finance
At Cashbook Finance we support the growth of ambitious SMEs who are tired of waiting 30, 60, or 90+ days for payment.
Cashbook Finance offers a fast, affordable and transparent method of boosting working capital. We do this by matching businesses who are waiting for payment from their corporate customers with high-net worth investors who provide short term capital by advancing funds against unpaid invoices.
1.1 What is Invoice Discounting?
Invoice Discounting is a quick and easy way to release the value of invoices whilst collecting payments from customers, allowing you to access your funds earlier.
1.2 How Invoice Discounting can help your business
If you find yourself waiting to be paid for the work you’ve done, or need an additional cash injection to help with your growth plans, then Invoice Discounting can be one way to help you manage your cashflow and focus on developing your business.
It is ideal for businesses who face cashflow challenges or want to finance their growth. It can fill the gap between raising customer invoices and getting paid, releasing cash that can help you manage your business's day-to-day activities or fund its growth. It also means that you can continue managing your sales ledger, credit control and collecting payments from your customers, unlike Factoring where we manage this process for you.
1.3 Is your business suitable for Invoice Discounting?
Your business could be suitable to use Invoice Discounting if you:
Yes: provide goods and/or services to other businesses
Yes: issue your customers with credit terms of between 30 and 90 days
Yes: have strong credit management and control reporting tools
Yes: can demonstrate a capable management team
Yes: have been financially viable for a minimum of six months
Yes: prefer to manage your credit control
Reverse Invoice Factoring
Reverse Invoice Factoring is when a finance company, such as a bank, interposes itself between a company and its suppliers and commits to pay the company's invoices to the suppliers at an accelerated rate in exchange for a discount. This is a lower-cost form of financing that accelerates accounts receivable receipts for suppliers. This approach has the following benefits for the company that is paying its suppliers:
The company can foster very close links with its core group of suppliers, since this can be a major benefit to them in terms of accelerated cash flow.
100% of the invoice value is available for factoring, rather than the discounted amount that is available through a normal factoring arrangement.
The company no longer has to deal with requests from suppliers for early payment, since they are already being paid as soon as possible.
Reverse Invoice Factoring has the following benefits for suppliers:
A cash-strapped supplier can be paid much sooner than normal, in exchange for the finance company's fee.
The interest rate charged by the finance company should be low, since it is based on the credit standing of the paying company, not the rating of the suppliers (which assumes that the payer has a good rating!).
The finance company acting as the intermediary earns interest income on the factoring arrangements that it enters into with the suppliers of the target company. This can represent an excellent source of income over a long period of time, so bankers try to create sole-source reverse factoring arrangements to lock in this source of income.
The biggest obstacle on the road to self-employment is often the thought of going for several weeks without getting paid. The idea of having an income-free month, or even two, can be a major worry. Even established freelancers and contractors can struggle with the unpredictability of getting paid. Clients don’t always pay up when you want them to but your bills still arrive with the same regularity.
Contractors can convert a monthly income to a weekly income simply and quickly, smoothing out those irregularities and giving you the predictability that you need. All you need to do is send in your timesheet every week. Once submitted, 80% of the value of your timesheet is transferred straight into your bank account. Your approved timesheet is a vehicle that demonstrates the debt exists and by sending you the cash for it the financier simply purchases the right to receive payment. So wave goodbye scary and inflexible overdrafts and loans. This way you are only ever using your own money to pay your bills.
With the right facility, invoice finance can be a cost-effective way of boosting growth and smoothing out seasonal trading, ensuring you can sell with confidence without worrying about the impact of large new contracts on your cashflow.