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• 02 May

  Reducing Your Invoice Finance, Factoring Or Invoice Discounting Costs

  A while back I published an article 6 Ways To Reduce Your Factoring Or Invoice Discounting Costs.

  I was looking through it just now and it rightly suggests that if you have a whole-turnover invoice finance agreement i.e. all your invoices are factored or discounted, and you don't have a constant need for funding in your business, you could save costs by switching to a selective style agreement. With a selective factoring or invoice discounting agreement you only factor or discount certain invoices, hence only those are funded and charged against.

  However, it occurred to me that the opposite may also be true in some cases.

  If you are using a selective factoring, spot factoring, spot invoice discounting or selective invoice discounting facility, and your requirement for funding grows, it may be more cost effective to transfer to a whole turnover style invoice finance agreement. With a whole turnover agreement, although you are charged against all of your invoices (which are also all funded less any restrictions) the overall cost is likely to be lower than putting all your turnover through a selective or spot facility. So in the right circumstances this could help you save money on your invoice finance costs.

  By Glenn Blackman