How does invoice discounting work?

Invoice discounting gives you access to the money in your accounts receivable ledger – unpaid customer invoices – much faster. Instead of waiting for your customers to pay your invoices, you take out a short-term loan from an invoice discounting company.

How does invoice factoring work?

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. A factoring company will pay you most of the invoiced amount immediately, then collect payment directly from your customers.

Is invoice factoring worth it?

Drawbacks—Invoice factoring can be costly, with fees ranging from 1% to 5% of the invoice value. These fees can add up, reducing your profit margins. Additionally, you may lose control over customer relationships as the factoring company handles collections.

What is invoice discounting factoring?

Invoice factoring could be a worthwhile option for businesses struggling with cash flow due to late-paying customers. But it will depend on your specific costs, profit margins, and whether the benefits of immediate cash outweigh the fees involved.

What is invoice discounting and factoring?

Whereas invoice discounting is a loan secured against your outstanding invoices, invoice factoring companies actually purchase the unpaid invoices outright. This is an important difference because it provides factoring companies with credit control, which enables them to deal with customers directly.

Is factoring invoices a good idea?

It is seen as a relatively high-risk form of lending and as a result, can see you paying heavy factoring fees, plus interest of up to 50% or more. Ultimately, this means that when you do receive the money for the invoice, you could be making a loss on that sale.

Electronic Signature
Features
Invoice templates
Factoring Invoice Discounting Made Easy

Unlock the Power of Factoring Invoice Discounting for Your Business

Streamline your document processes with airSlate SignNow's easy-to-use eSigning solution. Save time and reduce costs while enhancing your workflow efficiency.

Sign documents online

Learn more

Collect payments & signatures

Learn more

Add wet ink signature online

Learn more

Sign documents on iPhone or iPad

Learn more

Award-winning eSignature solution

Move your business forward with the airSlate SignNow eSignature solution

Create your signature in seconds on any desktop computer or mobile device, even while offline. Type, draw, or upload an image of your signature.

Deliver a seamless eSignature experience from any website, CRM, or custom app — anywhere and anytime.

Organize multiple documents in groups and automatically route them for recipients in a role-based order.

Collect signatures faster by sharing your documents with multiple recipients via a link — no need to add recipient email addresses.

Create unlimited templates of your most-used documents. Make your templates easy to complete by adding customizable fillable fields.

Create teams within airSlate SignNow to securely collaborate on documents and templates. Send the approved version to every signer.

See airSlate SignNow eSignatures in action

Create secure and intuitive eSignature workflows on any device, track the status of documents right in your account, build online fillable forms – all within a single solution.

Try airSlate SignNow with a sample document

Complete a sample document online. Experience airSlate SignNow's intuitive interface and easy-to-use tools
in action. Open a sample document to add a signature, date, text, upload attachments, and test other useful functionality.

sample

Checkboxes and radio buttons

Try a sample document

sample

Request an attachment

Try a sample document

sample

Set up data validation

Try a sample document

Understanding factoring invoice discounting

Factoring invoice discounting is a financial strategy that allows businesses to manage cash flow by selling their invoices to a third party at a discount. This process provides immediate access to funds, enabling companies to continue operations without waiting for customer payments. It is particularly beneficial for small to medium-sized enterprises that may face cash flow challenges due to delayed payments.

How it works

In factoring invoice discounting, a business submits its unpaid invoices to a factoring company. The factoring company then advances a percentage of the invoice value, typically between seventy to ninety percent. Once the customer pays the invoice, the factoring company releases the remaining balance, minus a fee for their services. This arrangement allows businesses to receive quick cash while outsourcing the collection process.

Benefits of using factoring invoice discounting

Utilizing factoring invoice discounting offers several advantages:

Improved cash flow: Businesses can access funds quickly, which helps cover operational costs and invest in growth opportunities.
Outsourced collections: The factoring company handles invoice collections, allowing businesses to focus on core activities.
No debt incurred: Unlike loans, factoring does not add debt to the balance sheet, preserving credit lines.

Common use cases

Factoring invoice discounting is commonly used in various industries, including:

Manufacturing: Companies often face long payment cycles, making factoring a useful tool for maintaining cash flow.
Freight and logistics: These businesses can benefit from immediate funds to cover operational costs while waiting for customer payments.
Construction: Contractors can use factoring to manage payroll and materials costs while awaiting client payments.

Considerations before choosing factoring invoice discounting

Before engaging in factoring invoice discounting, businesses should consider the following:

Cost: Understand the fees involved, as they can vary significantly between factoring companies.
Customer relationships: The factoring company will interact with your customers, so choose a reputable provider that aligns with your business values.
Invoice eligibility: Not all invoices may qualify for factoring, so it's essential to check the terms and conditions.

Integrating factoring invoice discounting into your workflow

To effectively use factoring invoice discounting, businesses should integrate it into their financial workflows. This includes:

Document preparation: Ensure all invoices are accurate and well-documented to facilitate the factoring process.
Regular review: Monitor cash flow and invoice aging to identify when factoring may be beneficial.
Collaboration: Work closely with the factoring company to streamline communication and ensure timely payments.

airSlate SignNow solutions for better efficiency

Keep contracts protected

Enhance your document security and keep contracts safe from unauthorized access with dual-factor authentication options. Ask your recipients to prove their identity before opening a contract to factoring invoice discounting.

Stay mobile while eSigning

Install the airSlate SignNow app on your iOS or Android device and close deals from anywhere, 24/7. Work with forms and contracts even offline and factoring invoice discounting later when your internet connection is restored.

Integrate eSignatures into your business apps

Incorporate airSlate SignNow into your business applications to quickly factoring invoice discounting without switching between windows and tabs. Benefit from airSlate SignNow integrations to save time and effort while eSigning forms in just a few clicks.

Generate fillable forms with smart fields

Update any document with fillable fields, make them required or optional, or add conditions for them to appear. Make sure signers complete your form correctly by assigning roles to fields.

Close deals and get paid promptly

Collect documents from clients and partners in minutes instead of weeks. Ask your signers to factoring invoice discounting and include a charge request field to your sample to automatically collect payments during the contract signing.

Collect signatures

24x

faster

Reduce costs by

$30

per document

Save up to

40h

per employee / month

Our user reviews speak for themselves

Kodi-Marie Evans

Director of NetSuite Operations at Xerox

airSlate SignNow provides us with the flexibility needed to get the right signatures on the right documents, in the right formats, based on our integration with NetSuite.

Check 5000+ reviews

Samantha Jo

Enterprise Client Partner at Yelp

airSlate SignNow has made life easier for me. It has been huge to have the ability to sign contracts on-the-go! It is now less stressful to get things done efficiently and promptly.

Check 5000+ reviews

Megan Bond

Digital marketing management at Electrolux

This software has added to our business value. I have got rid of the repetitive tasks. I am capable of creating the mobile native web forms. Now I can easily make payment contracts through a fair channel and their management is very easy.

Check 5000+ reviews

be ready to get more

Why choose airSlate SignNow

Free 7-day trial. Choose the plan you need and try it risk-free.
Honest pricing for full-featured plans. airSlate SignNow offers subscription plans with no overages or hidden fees at renewal.
Enterprise-grade security. airSlate SignNow helps you comply with global security standards.

Start free trial

Invoice Factoring Discounting

Invoice factoring discounting is an effective financial resource that can improve your business activities. Using airSlate SignNow, you can optimize your document signing workflow, making it efficient and budget-friendly. This guide will assist you in navigating the steps to utilize airSlate SignNow for your documentation requirements.

Procedure for invoice factoring discounting with airSlate SignNow

Launch your web browser and visit the airSlate SignNow site.
Register for a free trial account or log in if you already possess one.
Choose the document you want to sign or send for signatures and upload it.
If you intend to reuse this document, convert it into a template for repeated use.
Open your uploaded document to perform necessary modifications, such as incorporating fillable fields or adding specific details.
Sign the document and assign signature fields for the signers.
Click 'Continue' to set up and dispatch an eSignature request.

By taking advantage of airSlate SignNow, businesses can realize a considerable return on their investment due to its comprehensive features in relation to cost. The platform is designed for user-friendliness and scalability, making it suitable for small to mid-sized enterprises. Furthermore, it provides straightforward pricing with no hidden charges, ensuring clarity.

With outstanding 24/7 customer support available for all paid plans, airSlate SignNow is dedicated to enhancing your document management process. Begin your free trial today and discover the advantages personally!

How it works

Open & edit your documents online

Create legally-binding eSignatures

Store and share documents securely

airSlate SignNow features that users love

Speed up your paper-based processes with an easy-to-use eSignature solution.

Edit PDFs
online

Generate templates of your most used documents for signing and completion.

Learn more

Create a signing link

Share a document via a link without the need to add recipient emails.

Learn more

Assign roles to signers

Organize complex signing workflows by adding multiple signers and assigning roles.

Learn more

Create a document template

Create teams to collaborate on documents and templates in real time.

Learn more

Add Signature fields

Get accurate signatures exactly where you need them using signature fields.

Learn more

Archive documents in bulk

Save time by archiving multiple documents at once.

Learn more

Connect airSlate SignNow to your apps

Check out airSlate SignNow integrations

Data accuracy, security, and compliance

airSlate SignNow is committed to protecting your sensitive information by complying with global industry-specific

Learn more about security

be ready to get more

Get legally-binding signatures now!

Start your free trial

FAQs

Here is a list of the most common customer questions. If you can’t find an answer to your question, please don’t hesitate to reach out to us.

Need help? Contact support

How does invoice discounting work?

Invoice discounting gives you access to the money in your accounts receivable ledger – unpaid customer invoices – much faster. Instead of waiting for your customers to pay your invoices, you take out a short-term loan from an invoice discounting company.
How does invoice factoring work?

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. A factoring company will pay you most of the invoiced amount immediately, then collect payment directly from your customers.
Is invoice factoring worth it?

Drawbacks—Invoice factoring can be costly, with fees ranging from 1% to 5% of the invoice value. These fees can add up, reducing your profit margins. Additionally, you may lose control over customer relationships as the factoring company handles collections.
What is invoice discounting factoring?

Invoice factoring could be a worthwhile option for businesses struggling with cash flow due to late-paying customers. But it will depend on your specific costs, profit margins, and whether the benefits of immediate cash outweigh the fees involved.
What is invoice discounting and factoring?

Whereas invoice discounting is a loan secured against your outstanding invoices, invoice factoring companies actually purchase the unpaid invoices outright. This is an important difference because it provides factoring companies with credit control, which enables them to deal with customers directly.
Is factoring invoices a good idea?

It is seen as a relatively high-risk form of lending and as a result, can see you paying heavy factoring fees, plus interest of up to 50% or more. Ultimately, this means that when you do receive the money for the invoice, you could be making a loss on that sale.

What active users are saying — factoring invoice discounting

Get access to airSlate SignNow’s reviews, our customers’ advice, and their stories. Hear from real users and what they say about features for generating and signing docs.

This service is really great! It has helped...

5

anonymous

This service is really great! It has helped us enormously by ensuring we are fully covered in our agreements. We are on a 100% for collecting on our jobs, from a previous 60-70%. I recommend this to everyone.

Read full review

I've been using airSlate SignNow for years (since it...

5

Susan S

I've been using airSlate SignNow for years (since it was CudaSign). I started using airSlate SignNow for real estate as it was easier for my clients to use. I now use it in my business for employement and onboarding docs.

Read full review

Everything has been great, really easy to incorporate...

5

Liam R

Everything has been great, really easy to incorporate into my business. And the clients who have used your software so far have said it is very easy to complete the necessary signatures.

Read full review