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Methods of Confidential Invoice Factoring

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Sometimes confidential invoice factoring is referred to as confidential invoice discounting but they are generally one and the same. In a factoring scheme, a business is typically having difficulties collecting on unpaid debts on the books. The business then turns to a factoring specialist that analyses the debt and agrees to loan a percentage of money on what is owed provided they take over the books and the collections of those debts.

The Difference between Factoring and Confidential Invoice Factoring

At this point, once you have been advanced money against what is owed to you on the books, the factoring company will proceed to contact your debtors to collect on your outstanding invoices. As the factoring company is paid, a company like Real Business Recovery, you will receive your payment through the factoring agent. On the other hand, confidential invoice factoring allows your business, for the most part, to retain control of your books so that no one is the wiser. You continue collecting debts as usual but you have borrowed against that outstanding debt on the books in order to meet your day to day cash flow requirements.

Who Would Benefit from Confidential Invoice Factoring?

Businesses that would benefit from invoice factoring would be those which have business accounts on the books. Factoring is not for businesses that deal with private individuals but rather businesses with outstanding invoices from other businesses. If control of your books will be left with your company, the accounts on your books must be in fairly good shape as far as credit rating goes. The main advantage of confidential invoice factoring is that your debtors need never know you took a loan against the money they owe you. For this reason, if the account receivable looks to be bad debt, naturally the factoring company will want to take control of the books in order to be secure in recouping their investment. The bottom line is, the company that can benefit most from confidential invoice factoring is a company with ‘good debt’ invoices on their books.

If you feel that you have the kind of outstanding invoices on your books which are recoverable, yet not quickly enough to provide the cash flow you need today, then confidential invoice factoring may be just what you are looking for. However, if you have worries that one or more of your accounts may not be able to keep up with their invoices, you may want to see if the confidential invoice factoring organisation you choose has the capacity to take over the books to transition to conventional factoring in order to recover what is due to you. Confidential invoice factoring is not for everyone but it does help to mask the fact that you have been loaned money against outstanding debt.

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