Invoice Discounting is a means of improving your cash flow by providing an immediate injection of cash against the value of your sales ledger.

It is a great and easy way to increase cash flow when looking to support expansion programmes, mergers and acquisitions, fund a new venture, to raise payment for stock, commercial property or plant and machinery or simply provide cash flow fast. Invoice Discounting is also a useful financial tool when you are looking at restructuring either your company or your borrowing using the assets of the company to provide additional cash flow.

When you raise an invoice, up to 95% of the value of that invoice can be made available to you within 24 hours. The remaining balance is paid to you once payment is received from your customer. This means your business has access to an ongoing supply of cash linked to your sales. An Invoice Discounting facility can compliment your existing banking arrangements, unlike a traditional bank overdraft it offers flexibility based on your sales, so as your business grows so does the amount of funding available to you.

Invoice Discounting is confidential from your customer base as you continue to manage your credit control and sales ledger administration. You simply provide a list of invoices raised, at which point up to 95% of their value will be made available. When payment of the invoice is received into your client account with the provider the remaining balance is made available. This ensures that you don’t have to operate with unpredictable cash flow waiting for the payments to come in and what’s more you can protect yourself against bad debts. In addition to improved cash flow it allows you to maintain a strong working relationship with your customers as credit control will remain in house.

You can also monitor all transactions as most providers give you 24-hour internet access to your account allowing you to keep track of the amount of funding available to you. Several providers have also developed a secure software package, which interacts with the majority of available accountancy packages, reducing administration to a few clicks of the mouse.

The following products can also be used in conjunction with an invoice discounting agreement to give a greater boost to your cash flow:


Bad Debt Protection
Up to 100% Bad Debt Protection – Peace of mind should one of your customers become insolvent as this facility will safeguard against any losses incurred.

Stock Finance
Increase your cash flow by releasing money against your stock.

Asset Finance
Raise additional cash flow by unlocking the value of the assets you already own.

Trade Finance
Importing goods and need to pay up front? Fund your import purchases to combat the impact on your cash flow.

Purchase Order Finance
Helping you fund that important large order from start to finish.

Commercial Mortgage
If you own a property this can be a cost effective way of boasting cashflow long term.

Invoice discounting - How Much Does It Cost?

The charges fall into two main categories:

1. A Service Charge
Calculated as a percentage of each sales invoice, alternatively in some cases a yearly fixed fee may be negotiated.

2. A Discount Charge
Calculated against funds drawn at a rate often better than a traditional bank overdraft. 

What Next?
If you would like to find out more about the benefits of invoice discounting please click here

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'Invoice Discounting explained'