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• 19 Dec

  Split Ledger Invoice Finance Against Invoices To Neutral Vendors

  

  Recruitment companies commonly use receivables financing (often called Payroll Finance) to help manage their cash flow. In a recent case, we were asked to assist a healthcare staffing agency that dealt with neutral vendor customers - and were facing funding limitations from their existing receivables financing company.

  Split Ledger Invoice Finance Against Invoices To Neutral Vendors

  Our client already had an invoice financing arrangement in place. However, their current invoice financing company was unable to fund some of their invoices to the full level they required. These were invoices to neutral vendors (also called RPOs).

  RPOs - Neutral Vendors

  The term "RPO" or "neutral vendor" refers to umbrella purchasing organisations that are often involved in the staffing supply chain. They will typically sit between large buyer organisations (that need a lot of temporary staff placements) and a number of smaller staff agencies that can supply part of the ultimate buyer's staff requirements. This simplifies the process for the large buyer as they only have to deal with one party, the RPO.

  The Funding Issue

  However, sometimes an invoice funder can face problems providing the full level of finance against invoices to these neutral vendor organisations. This was the case here and our client required a solution as they were a new start company that was seeing increasing sales to RPOs so they needed payroll finance against neutral vendor invoices.

  The Solution - Split Ledger Financing

  We were able to orchestrate something quite unique for our client. We found them a second invoice financier that was prepared to split the sales ledger with the existing funder. This split ledger invoice finance arrangement would allow the new finance company to fund just the RPO, neutral vendor invoices. The original funding arrangement also remained in place.

  Solving Unusual Financing Problems

  This is a very unusual style of arrangement for the receivables financing sector which depends upon flexible funding partners that are prepared to take a more flexible approach. If you need to solve similar types of unusual financing problems, please contact us at FundInvoice at 03330 113622 or use the quote search form on this page. We specialise in helping clients find the money they need, even in circumstances where others have been unable to help.

  By Glenn Blackman