- 08 Apr
22 Percent Confidential Invoice Discounting Saving
Moving their confidential invoice discounting facility to a new provider could save one of our clients more than 22% on the total fees that they are currently paying their existing discounter. This is an example of the savings that can be achieved if you check your pricing against the market.
Confidential Invoice Discounting Quotes
The client was using confidential invoice discounting from a bank backed provider, and they wanted to see what could be saved. Their discounter immediately gave them a small reduction in their fees but even after that reduction we were still able to find them a savings of more than 22% of their projected total costs per annum. This would be a significant cost saving.
No Renewal Fees
I also found it interesting to look at the component elements of the handful of the best confidential invoice discounting quotes that we sought for them. Their existing provider was charging over £1K per annum just to renew their facility. We found them quotes with reduced renewal fees but the one that they favoured had no renewal fee at all.
Reduced CHAPS Charges
The differences in CHAPS charges was also interesting. This is the fee to receive funds into your bank account via a CHAPS transfer. This ensures they are received the same day. Amongst the quotes that we found for them the CHAPS fee was as low as a third of what they were already paying. This can add up to a significant amount if a client is taking a CHAPS payment each week.
Lower Administration Fees
The administration fees (also sometimes called service chrarge), made up the bulk of the annual costs. This element alone was over 36% lower in the case of the cheapest service charge quote that we found for them. Another huge saving from checking their pricing against what is available across the market.
Refactoring fees are additional fees charged, as a percentage of invoice value, if invoices exceed a specified age. Although this is not the correct terminology for an invoice discounting facility, it tends to be the term used by much of our industry. If an invoice discounting client fails to collect in their debts on time, they can have to pay these additional costs. Although they were not paying any refactoring fees to their existing provider, and they were not included in the best of the quotes that we found for them, I noted that some funders were quoting a refactoring fee which could add additional costs to their quotes. This reinforced how it can be important to look at a variety of providers in order to get the best possible deal for your company.