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• 23 May

  How Quickly Can A Business Access Funds After Invoice Submission

  How quickly can a business access funds after invoice submission? This is a common question posed to invoice finance companies when a business is using a financial facility that involves prepayments against credit invoices raised to customers.

  How Quickly Can A Business Access Funds After Invoice Submission?

  In a nutshell, the stated answer is normally "within 24 hours".

  However, there is a lot more to understand about that question and it can affect the actual timeline to release cash.

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  Time To Access Funds Without An Invoice Finance Facility

  The measure by which to judge the benefit of using an invoice finance facility is the time it would take to access funds from debtor payments if you didn't have a facility.

  Standard payment terms in the UK across many sectors are normally "net 30 days". This means that the debtor has 30 days from the date of the invoice to remit the payment. In some cases longer (or shorter) terms may be expected so this could be 60 days or even more.

  The issue with open account invoicing (giving a credit period to pay an invoice) is that there is not guarantee that the debtor will pay before the end of the credit period. Many companies will pay later than the terms that have been provided - this retains cash improving their own liquidity and reducing their need to borrow.

  Research suggests that there has been a 20% increase in the number of buyers taking 80 days or more to pay their suppliers. That's a long time to wait but consider that there will be a range involved in this average with many waiting much longer.

  Time To Get Money Against Invoices With Factoring Or Invoice Discounting

  Using financing against your invoices can remove that waiting process. Typically, funders state "within 24 hours" to provide funds against new invoices but in some cases, that can be a same-day process (some may charge an additional fee for this).

  Time To Set Up The Facility

  Also, consider the time it takes to set up invoice finance. This can vary from same day to several weeks or more, depending upon the processes of the provider that you choose. Our record for set up speed is to have paid out funds within just 7 hours of initial enquiry.

  Once the facility is in place, then funding against new invoices can be accessed on the same day in most cases.

  The time to set up the facility is important to ensure that you don't leave things too late before you apply.

  Invoice Submission Mechanisms

  Many funders now have systems that integrate with your accounting software, This allows you to access invoice upload and either submit your full sales ledger or batches of invoices for prepayment.

  One-Off Exceptions

  As mentioned above some funders will make exceptions for providing payments quickly or in some cases even overpayments which go beyond what you are due. These may be subject to an additional fee.

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  Further Resources

  Please see our Guide To Invoice Financing.

  By Glenn Blackman