confidential invoice discounting

Confidential invoice discounting is the largest growth area in receivables finance and companies using invoice discounting facilities are generating a combined turnover of £119 billion per annum according to recent statistics released by the trade body. These figures are increasing quarter on quarter.

An interesting statistic (unfortunately not available) would be how these companies select the invoice discounting company with which to entrust the financial health of their business, as selecting the wrong one could have devastating effects.

It would seem that the majority of  companies using confidential invoice discounting to speed up cash flow take the simplest route and sign up with the subsidiary of their clearing bank ( approx 70% ) without first establishing whether or not there are more suitable options available.

The rest entrust their company's financial well being to a company selected in a variety of ways ranging from looking in Yellow Pages -which is surely why there are so many invoice finance companies beginning with the letter A - to asking their accountant or insurance broker, who's probable knowledge of the industry comes from the factoring company salesman who has most recently canvassed him.

It should be straightforward but in reality it isn't and we have very real concerns with the way that some factoring companies operate so have set out details of the possible pitfalls in the following pages. Most of the areas of concern apply primarily to factoring but also relate to invoice discounting as you will find out if you take the time to read the next few pages

Please see the next page for details on selecting the invoice discounting company