Most people assume that all business financial services are the same. This is why they don’t seem to be able to say the difference between financial invoices and factoring. Mostly, these 2 concepts are one and the same. Business finance is here to tell us that it is not the problem! There are many differences between these 2 services. This post is to provide a simple understanding of what varies with the factoring of accounts receivable from financial invoices. Hopefully, entrepreneurs from all boards will be able to determine which type of financial services are the most suitable for their companies, or will give them more benefits!
In fact, the provider plays the role of managing a large sales book, credit control, and pursuing customers so that they can complete their invoices in the company. When we refer to someone as a provider, we refer to the financial company that you approach to get financial services from.
This is completely different from the financial discount invoice because it is still your business that controls its own sales book. It also is your business responsibility to pursue your customers so they can complete their invoices with your company. There are no other entities that will do that for you.
Another difference between financing and factoring the invoice receivable is confidentiality. If you use the factoring service, customers must complete their invoices with factoring companies, and not with your business. Your customers will soon be aware of your financial arrangements with this other company.
When you decide to get invoice financing or discount invoices, your client will still be able to pay you. Unless you choose to tell your customers, they really don’t need to know that third parties are involved in your financing situation.
Whatever you feel is the best for your business to have financial arrangements that you follow. However, rest assured that both types of services make it possible to benefit similar. Do you get one or the other, you will still be able to receive up to 90% of your extraordinary invoice values within 24 hours. Your cash will also be secured without you submitting other assets. The level of funds available you can also be enhanced easily because your turnover level increases. Most importantly, money is easily released so you can handle cash flow problems in business. With all these benefits available, everything that is truly left to do is make a choice! With these 2 financial business settings, you can’t go wrong!