- 13 May
Invoice Discounting Masquerading As Factoring
Recently, we have spoken to several businesses who have had lukewarm opinions of factoring generally due to the existing service that they are using failing to assist them in collecting their outstanding sales invoices - credit control. What appears to be happening is that some invoice finance companies are offering an invoice discounting facility under the banner of a factoring offering.
In order to be described as factoring the service must include some element of credit control service but there are offerings on the market where the majority of the credit control is left to the client. In many cases these are still termed as "factoring" rather than the more apt description - "invoice discounting".
This practice is not doing the industry any favours as we frequently speak to clients that incorrectly percieve all factoring companies as being the same and anticipate a similarly poor credit control service from all of them.
In reality, this in not the case. There are plenty of factoring companies that offer a comprehensive factoring credit control service that their clients can rely on to alleviate the need for them to do the work themselves.