Invoice Discounting allows businesses to get money from their customers almost immediately, rather than waiting the typical 30, 60 or 90-day credit term or worse still even longer. A company that needs immediate cashflow will sometimes use invoice discounting at a discounted rate in order to receive capital at an expedited rate. An invoice discounting company that discounts these invoices, will pay the company the amount on the invoice after it deducts a small fixed percentage of the total.
Many companies do not use invoice discounting or factoring when they have no options left. This is a habit that needs to be broken, because invoice discounting should not be viewed as a last resort.
Companies that are growing rapidly should use invoice discounting not as a last resort, but as a first priority. In order to keep a company growing at an accelerated pace, the company must have a lot of working capital at its disposal. Invoice discounting is a way of securing this working capital instantly, without the fear of debt, while only paying a small cost for the service. If enterprise size companies use invoice discounting in order to keep working capital readily available, then shouldn’t you?
A lot of companies have the opinion that invoice discounting is an expensive option. Many see invoice discounting almost as a cost that will eventually be too expensive to afford eating into much needed profit. These assumptions are completely incorrect, leading people away from invoice discounting as a common practice. It is better to view invoice discounting as a percentage fee based on the total amount of the invoice that is discounted.
Obtaining a bank loan with interest rates could put your business at risk of going into debt, being forced to turn down future business due to the lack of working capital or cashflow in your company. Choosing invoice discounting could possibly save your company; it provides you with working capital that’s readily available for whatever comes at your business next. Don’t make invoice discounting a last resort, make it your first decision.
Celtic ID will advise you on whether Invoice Discounting will be right for your business or not. We will speak to you in plain English and give you all the facts you need to make a decision. Why not call us on 01 230 0866 for a confidential conversation.