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Invoice Discounting Cashflow Finance

What is Invoice Discounting Cashflow Finance?

Invoice Discounting Cashflow Finance is a funding-only form of cashflow finance used by larger businesses in Australia to improve business cashflow. As with factoring, the business sells its debts to the financier, who then pays the business 70% - 90% of the value of the invoices (and the balance when the customer pays), which provides immediate cashflow to the business. The financier does the waiting for 30 - 90 days for the customers to pay. Invoice Discounting Cashflow Finance facilities are generally confidential so the customers are not aware of the financier’s involvement. Invoice Discounting Cashflow Finance typically does not offer sales ledger management, collections or other related services.

How does Invoice Discounting Cashflow Finance improve business cashflow?

To improve business cashflow, the business provides copies of its sales invoices for the goods and services it has sold and delivered to its customers. The financier assesses the customers and buys the acceptable invoices, paying funds immediately to the business. The financier will liaise with the business to ensure customers make timely payments, which usually go to the financier via the business. The invoice discounting fees will vary depending mainly on how long it takes customers to pay. Invoice Discounting Cashflow Finance will improve business cashflow by accelerating customer payments.