Other Services That an Invoice Finance Company Can Provide

The benefits which can be experienced from an invoice finance arrangement are not always limited simply to an immediate injection of cash. Whilst most businesses use invoice finance companies solely to help smooth over cashflow issues, there are a number of other useful services which can be provided to businesses seeking to improve their accountancy functions.

The most common ancillary function performed by invoice finance companies is the ability to comprehensively credit check both existing and potential customers. Whilst many small businesses have neither the ability nor the luxury to be able to credit check major contracts, an invoice finance company has the experience and the contacts necessary to be able to do this cheaply and effectively. Indeed, many finance invoice companies make it a condition of any major deal to carry out such checks on the largest customers of the recipient company, to ensure that their investment will be safe and that the invoices being handed over will be collected in a reasonable time frame. A wise recipient company will use this procedure to its own advantage, finding out more about its customer base and identifying potential future customers who may be better able to deliver on contractual promises.

Bad Debt Protection

Despite the comprehensive credit checking facilities offered by many invoice finance companies, problems can still arise with collection of invoices. In reaction to this, a number of finance agencies now offer receipient companies the option to enter into ‘bad debt protection’, in the event of a default by a major customer whose invoices were expected to cover payment to the finance agency. In essence, this functions as a form of insurance on the invoice finance deal, and provides peace of mind to the recipient company. If the agency you are dealing with does not offer this kind of service, it is always possible that the failure of a major customer could leave you not only with unfulfilled invoices, but also with a significant debt to the finance agency which must be paid from other funds.

Accounting Consultancy

Increasingly, finance agencies are also leveraging their accountancy and invoice management expertise into various forms of consultancy. This is particularly the case when a recipient company has entered into an invoice discounting arrangement, as opposed to factoring. Whilst the latter involves the invoice agency pursuing and collecting the invoices itself, the former means that the responsibility for collection is retained by the original company. In such situations, it makes sense for the invoice agency to ensure that the company is as competent in credit control as is possible, and it makes sense for the receipient company to take advantage of the experience and expertise of the collection agency. Even if you have entered into a factoring arrangement, however, it may be worth enquiring as to whether the finance agency offers credit control consultancy. Extra training in financial matters never hurts, and making sure that as many of your invoices are collected as possible can help to maintain your bottom line!

We can offer you financial solutions to help keep your cashflow healthy. Request a quote now to find out how much invoice finance can save you.


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