Summary: Waiting 30, 45, or even 60 days to get an invoice paid is a challenge for many business owners. Small companies often have to wait for payment because their commercial sales are made on credit. This type of trade credit is commonly known as “payment terms” or “trading terms.” Companies must offer payment terms […]
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What Are Net-30 Trading Terms? How Do They Work?
Summary: Most commercial transactions use payment terms, typically referred to as offering “Net 30 – 60 days” trading terms. These terms are a form of credit that typically gives clients 30 to 60 days to pay an invoice. Companies must offer trading terms if they want to remain competitive, especially when bidding for large opportunities. […]
Should You Offer Early Payment Discounts? (2% / 10 Net 30)
An early payment discount is an incentive that companies receive from suppliers in exchange for a quick payment. It is usually offered by suppliers that need to improve their cash position. In this article, we discuss: 1. Why do you need early payment discounts? Selling to commercial clients can be a challenge for small and […]
Debtor Finance Interest Rates Explained
Summary: Debtor financing transactions can be structured in various ways. In this article, we explain how the cost of a debtor financing transaction is determined by using the most common transaction structure. If you are not familiar with debtor financing, read “What is Debtor Financing?” before reading this article. In this article we cover the […]
How Does Debtor Finance Work?
Debtor financing has been gaining popularity in Australia as a way to finance small and growing businesses that need working capital. This solution allows you to finance slow-paying invoices, which provides immediate funds to pay for company expenses. This article explains how the debtor financing process works and helps you determine if it is the right financing […]
How are Invoice Verifications Done?
Summary: Debtor finance companies can finance an invoice only after it has been verified. This article helps you understand why invoices are verified and how the process works. We cover the following: What is debtor finance? How are invoices verified? How are problem invoices handled? 1. Understanding debtor finance Debtor finance, also known as invoice […]
Debtor Financing v. Overdrafts
Summary: Small companies that experience short-term cash flow problems often have few alternatives. Their available options often include getting funds from investors, a business loan, an overdraft facility or using a debtor financing programme. In this article, we compare debtor financing to an overdraft facility to help you determine which one is better for your […]
What is Invoice Discounting?
Invoice discounting is a form of debtor finance. It helps companies that have cash flow problems because customers are paying invoices in 30 to 90 days. Offering payment terms is expected when working with larger commercial and industrial customers. However, allowing customers to pay in 30 to 90 days can affect your cash flow if your financial reserves are […]
What is Invoice Factoring?
Summary: Invoice factoring is a type of debtor financing that allows a company to finance its accounts receivable ledger. This financing is often used by companies that have cash flow problems because their clients pay invoices in net-30 to net-60 day terms. Factoring has been gaining popularity in Australia as a way to finance small […]
What is Debtor Finance?
Summary: Debtor financing is an umbrella term used in Australia that encompasses a number of products that finance invoices. The most common debtor finance solutions are invoice factoring and invoice discounting. Invoice factoring and discounting are used by companies that offer 30- to 60-day terms to customers but have problems waiting for payments. Debtor finance […]