It makes business planning and forecasting more accurate and allows you to take advantage of opportunities that might otherwise be unaffordable.īetter chance of your business surviving - Better cash flow gives your business a better chance of survival. Improved and more predictable cash flow - By using invoice factoring, you can have the bulk of your invoices paid almost immediately rather than having to wait for the money to come in (potentially after extensive chasing on your behalf). Or for any reason for which cash flow might otherwise be a constraint Take advantage of seasonal business opportunities Invoice factoring allows you to release that cash almost immediately, or at least a large part of it. That 30-day chunk of revenue might represent the bulk of your potential cash flow, but you can't actually use it. Most of your debtors will pay within 30 days – some may require chasing, some may not – while others may go over the limit and require more persistent effort on your part. Your company should use invoice factoring when you routinely have a lot of invoices outstanding and your cash flow is suffering because of it.Īs an example, say your organisation sells on 30-day payment terms. The factoring company pays you the remaining invoice amount – minus their fee – once they've been paid in full. The factoring company chases invoice payment if necessary. Your customers pay the factoring company directly. The factoring company pays you the bulk of the invoiced amount immediately, typically up to 80-90% of the value, after verifying that the invoices are valid. You "sell" the raised invoices to a factoring company. You invoice your customers for those goods or services. You provide goods or services to your customers in the normal way. Invoice factoring means selling control of your accounts receivable, either in part or in full. Invoice factoring is also referred to as accounts receivable factoring or debt factoring. There are benefits and disadvantages to invoice factoring, which we'll cover in this article. A factoring company will pay you most of the invoiced amount immediately, then collect payment directly from your customers. Those with more experience can earn around £50,000 per year, while those in senior positions can earn £100,000 per year and often much more.Invoice factoring is type of invoice finance where you "sell" some or all of your company's outstanding invoices to a third party as a way of improving your cash flow and revenue stability. Pay can vary a great deal depending on the precise role within trade finance, but entry level roles may pay around £30,000 per year. Working hours tend to be regular 9am - 5pm, but additional work may well be required in order to finalise a deal or transaction. Many trade finance positions are in London, since the capital plays host to many national and international financial organisations, so candidates should be prepared to live and work in this city. Experience within banking at a lower level is a good way to work towards trade finance roles. Qualifications and entry requirementsĪ degree in international business, accounting or finance will normally be required to work towards a role in this sector.Īlongside degree courses, there are a number of part time courses in trade finance and related subjects, particularly in London, which can put candidates in a good position for applying for trade finance vacancies. On this page are listed a number of recruitment agencies with experience in filling trade finance positions. There are many different aspects to trade finance, such as factoring, forfaiting, structured commodity finance, trade credit finance and numerous others. Where an exporter requires guarantees that an importer is in a position to pay once goods or services are delivered, a trade finance expert works with the associated banks and the importer in order to minimise or eradicate risk of non-payment. Trade finance roles involve the facilitation of trade deals between importers and exporters.
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