Here’s how it actually works to get paid faster. It is an effective way to clear all your outstanding invoices. Note: The invoice factoring fees range between 1%-5% depending upon the invoice value, sales volume, etc. Out of the total $14550, 85% of the value will be paid by the company within a few days and the remaining amount will be paid after the factoring company collects the due invoices. Suppose your total invoice value is $15000, the calculation would start at $14,550 as a 3% factoring fee will be charged by the company. The above table represents how your invoice value is factored when you sell it to a factoring company. Let’s discuss with an example for a better and clear conceptual understanding! Invoice Factoring Example Total Invoice ValueĨ5% of invoice value as an initial advance It is beneficial for your business as it gets all your accounts receivable faster in exchange for a small amount of factoring fee. It is an invoice financing process where you ‘sell’ some or all the invoices to a third party to get all your outstanding invoices cleared within a certain period. Solution: Invoice Factoring Here’s what it actually means! What is invoice factoring? Wandering, as to how you can turn your unpaid customer invoice into fast cash flow?

Delayed payment can stall your business operation and would hinder your business growth fiscally. Isn’t it?Īll business entrepreneurs must have faced or are facing such a situation due to some of their slowing paying customers.

Chasing your clients after completing the project feels embarrassing and tiresome.

Factoring invoicing