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When does it make sense to use invoice discounting rather than factoring?

Making your choice

Invoice discounting and factoring are both well established types of invoice finance. Whichever one you choose, you will be unlocking cash from unpaid receivables which you have sold either to a bank that offers these services or a specialist invoice finance company.

Invoice discounting works in a similar way to invoice factoring, but allows your business to remain in control of debt collection and customer communication. Therefore, invoice discounting might be the most appropriate option for larger businesses with a well-established and well-resourced finance department and for whom customer relations, reputation and financial confidentiality are a priority. As all administration and debt collection is taken care of in-house, the return on each invoice is much greater.

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