- 02 Feb
41% Cost Saving On Invoice Finance
You may be forgiven for thinking that any existing users of invoice finance will have moved providers, and will be benefiting from the lowest prices that are on the market, but that is clearly not the case. This was highlighted in the case of a prospect that we assisted over the last few weeks.
They spoke to us regarding an existing invoice financing facility, that was being provided by a bank owned invoice finance company. Now normally, you might expect that the banks will offer very fine rates, and in many cases they do as they tend to have access to funds at cheaper rates that many of the independents. However, this was not the case with this particular prospect who was paying quite expensive fees to his provider.
41% Invoice Finance Cost Saving
We conducted an invoice finance quote search for them, and we managed to find them an alternative facility which was priced to save approximately 41% of the overall annual cost of their existing facility - a very substantial amount of money that they have the potential to save.
Cost Savings Combined With Growth
It is also true that the cost savings can increase if you are going through a period of high business growth. The reason is that most pricing tends to be linked to the volume of turnover that is transacted i.e. you pay a percentage of the value of the invoices that you raise. This is just an example, but for illustrative purposes let's suppose that you transact £500K turnover, and say the service charge is 1%, you would pay £5K. If you then transact £1M at the same rate, you will pay £10K - so any saving on that percentage will multiply the amount of cash you save as your turnover increases.
Discount charge (similar to interest) also tends to be a percentage of the funds in use, hence it will also increase as the business volumes transacted increase i.e. as you raise more invoices, you draw down more funds and the amount of the discount fee incurred increases. Therefore, by driving down the percentages that you are paying for service charge and discount charge, you save money both now and as you grow.
- 29 Jan
Service Charge & Discount Charge Differences Between Invoice Discounting Companies
I recently reported the 86% differential between the cheapest and most expensive quotes that we received for a particular client situation. This difference was based on a comparison of the anticipated charges that might be levied by different invoice discounting companies.I thought it might be interesting to look in a bit more depth at the components of those costings, and how they vary between...
- 24 Jan
Invoice Discounting Minimum Monthly Fees Charges Compared
I was asked to clarify if minimum annual fees are still charged monthly, and how many providers offer a flat fee structure (as opposed to charging a percentage of turnover). The answer is that most providers have moved away from quoting a minimum annual fee, towards quoting minimum monthly fees. The effect is the same, but I guess the number presented to a prospective client seems much smaller...
- 23 Jan
41% Cost Saving On Recourse Factoring
One of the things that we pride ourselves on is keeping up to date with pricing around the factoring market, so that we can find the best rates for our clients.In a recent example we were able to find a c. 41% projected cost saving for a prospect, on the fees that they were already paying - this equates to a substantial annual cost saving for the company.This particular example involved a company...