April 29, 2016

Invoice Discounting and Invoice Factoring Costs

Two question marks on a balance

Invoice Factoring Costs

If your business needs cash fast, then invoice discounting and factoring is for you. For speed and ease of getting the required cash, it cannot be beaten.

Same day cash is very possible.

Working Capital Finance simply takes a small percentage of the total invoice or a flat fee off the value of the invoice and send the rest of the value of your invoice as an EFT straight to your bank account.

We deduct a single fee from the invoice that we buy from you and EFT the rest to your bank account. Our single cost is the higher of:

We deduct a single fee from the invoice that we buy from you and EFT the rest to your bank account. Our single cost is the higher of:

  1. A flat fee of 1.6% of the invoice value if the repair invoice is larger than $20,000
  2. If the insurance repair invoice is less than $20,000 the flat fee is 1.75% of the insurance company invoice value; or
  3. A minimum of $80 per invoice
  4. you pay either the the 1.6% or $80 per invoice, not both.

If the insurance company pays us less than the full value of the invoice, then you must pay us the outstanding residual.

This can be done by giving us some more invoices to factor. We will then take the residual off the amount otherwise due to you. It is your decision whether to chase the insurer for the outstanding residual or not.

When does using Invoice Discounting or Invoice Factoring make sense?

  • When the consequences of Not making a payment are severe. You cannot risk Not paying wages on time Or having a supplier freeze your account
  • When the extra income that have cash immediately is LESS THAN the extra cost of factoring
  • When the extra costs avoided (perhaps late fees) are less than the cost of the Factoring.

In either of these circumstances, using Invoice Factoring/Discounting will either net you more income or lower your net costs.

That’s why even the biggest and smartest smash repairers use invoice discounting/factoring from time to time.

Ensuring a Smooth, Hassle-Free Invoice Discounting Process

In order to get the money you’re owed quickly, keep the following information in mind.

Each time you use our service, you must send us the same information you know the Insurer would require:

  • The original invoice addressed to the insurance company
  • The “Repair Authority” from the insurance company authorising your business to do the repair work
  • A copy of the original quote as adjusted by the Assessor (only if the Repair Authority does not detail every authorised labour or parts cost)
  • A copy of invoices for sublet repairs (only if requested by the Assessor)
  • A copy of the signed release from the insured customer accepting completion of repairs (if required by Insurer). Use either the Accessors or Insurer’s Release form or our Completion Certificate (Form C)

Delays in receiving your cash will occur if you fax us incomplete or unsigned documentation :

  • You did not sign the form
  • There are missing sublet invoices or  Insurance Company “Authority to Repair” forms
  • There are missing or no copies of the adjusted quote/estimate for additional repairs
  • You miss out pages we require

Have Questions? Contact Us!

We are here to help you – if you need more information or advice, please click call us on 02-9132 4452 or email admin@workfinance.com.au. Need something else? Head to our contact page to leave a message.