What is invoice discounting
Invoice discounting is a common financial tool or an arrangement with a financial institution or bank. Leave with funding to advance funds to a company against its debtors (customers), which helps cash flow and provide liquidity to customers. This form of financing has proved to be a very attractive form of finance, however, is mostly ignored by bankers, consultants and contractors themselves.
Most companies offer their products or services on credit to customers and, therefore, a active mass of their debtors book is not fully used by the majority. They are also often many companies do not accept orders large companies, due to payment terms required. The purpose of this form of financing is to give the employer access to funds immediately, without having to wait for the client to pay the bill. This is especially beneficial for those of you who are in a period of growth and commit working capital credit to customers debtors. Indeed, the trade so that they begin to trade out of trouble.
Work simple products is as follows: A company that lends money to accept that all invoices raised you will have available a certain percentage value bill at their disposal. This can also be done in a bill or a project. Not necessarily to use the entire amount (credit limit) immediately, but we are sure that you can use the facility if necessary. We can therefore only act as an overdraft with the advantage that is not directly influenced by a fixed security as required by the bank and the advantage of increasing your credit limit as your business develops.
The process of obtaining a credit limit in place is actually very simple: The factor "(the lending company) proves to all its customers, their customers pay the factor directly. The postman will collect all amounts due and to offset this amount to your account. Balance The invoice will be paid on your account, less fees and interest.
For this installation, you can log on www.fogwell.co.za
About the Author
John-Ernest Fogwell has been educating companies on new legislation and new business structures for the last 10 years. His career in training started with the launch of the MFRC and its regulations, training over 100 micro lenders on its impact and acting as advisor to 5 micro lender associations.
During Fogwell’s career is has acted as Company Secretary and Advisor to numerous large corporate companies as well as several business chambers. As a past president of the Chamber of Small to Medium Business and Past President of WDASA he has grown into a well respected lecturer, author and business consultant.
John currently educates companies on the New Companies Act, The Consumer Protection Act, The BEE Codes of Good Practice and most recently he has been training companies in Uganda, Nigeria and Kenya on Corporate Governance and the setting up of effective Public Private Partnership.
To find out more about Fogwell go to www.jfogwell.blogspot.com to contact Fogwell please e-mail john@fogwell.co.za
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