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• 14 Jul

  What Does An Invoice Finance Survey Involve?

  Considering invoice finance? Before a facility is approved, many providers will carry out a survey of your business. For a complete overview of invoice finance, including how it works, facility types, provider comparison and quotation searches, see our main Invoice Finance page.

  An invoice finance survey is typically a review of your business conducted by a surveyor on behalf of the provider. It may involve a visit to your premises, a remote review of your records, or a combination of both. The purpose is to help the provider understand your trade, your customers, your sales ledger and any issues that could affect how much funding can be made available.

  The surveyor will usually check that your company records match the information provided during the application process. They may review your sales ledger, customer accounts, purchase ledger, sales and purchase invoices, contracts, PAYE records, VAT records and other documents connected with your trading activity.

  What Does The Surveyor Look For?

  One of the main things the surveyor will assess is whether anything could reduce the value of your sales invoices. These reductions are often known as dilutions. Examples include credit notes, discounts, disputes, contra accounts, set-offs, sale-or-return arrangements or contractual terms that affect when payment becomes due.

  The surveyor may also look at the quality and spread of your customers, how quickly invoices are normally paid, whether any invoices are overdue, and whether your paperwork provides a clear audit trail from order through to delivery, invoice and payment.

  What Happens After An Invoice Finance Survey?

  Once the survey is complete, the surveyor will typically prepare a report for the provider. This report helps the funder assess the quality of the sales ledger, the strength of your internal systems and any risks associated with the business.

  The provider will then decide whether to proceed with the facility, what funding percentage to offer and whether any special conditions should apply. In some cases, the provider may ask for additional information before making a final decision.

  Can An Invoice Finance Application Be Declined Following A Survey?

  Yes. Although many surveys result in approval, a provider may decline an application if significant concerns are identified. Examples include poor record-keeping, excessive customer disputes, high levels of credit notes, financial difficulties, weak paperwork, or contractual issues that make invoices difficult to fund.

  However, different invoice finance providers take different views on risk. If one provider raises concerns, another may still be willing to consider the facility, especially if the issues can be explained or managed.

  How Long Does An Invoice Finance Survey Take?

  The time required depends on the size and complexity of the business. A smaller business may only require a few hours, while a larger organisation with a more complex sales ledger may need a survey lasting one or more days.

  The process is usually quicker if records are well organised and key documents are available when requested.

  Can An Invoice Finance Survey Be Carried Out Remotely?

  Yes. Many providers can now complete all or part of the survey process remotely using electronic records, access to accounting software, emailed documents, and video meetings. However, some providers may still prefer an on-site visit where the business is larger, more complex or has unusual trading arrangements.

  If you are unsure whether your business is likely to pass an invoice finance survey, FundInvoice can help you compare providers and identify options that may suit your circumstances. Just call us on 03330 113622 for support.

  By Glenn Blackman