If your business is already large enough to afford the staff and information systems to efficiently manage and collect your outstanding invoices you may want to consider invoice discounting rather than factoring service. It is identical to factoring except that the sales ledger management - the collection responsibility - remains with you. The service is undisclosed to the customer.

Again there are two costs: An administration charge, either a flat fee or a percentage of turnover and an interest charge for the cash advances.

Rule of thumb: if your business has an annual turnover of more than £1 million and an own accounting system, you may want to look at invoice discounting over factoring - however every business is different and you may still be more interested in factoring.

Almost all invoice factors will offer an invoice discounting service but some of the smaller factors may have limits to what they will underwrite.

For a table comparing invoice discounting and invoice factoring click here.

In addition to factoring prices, we also allow you to compare invoice discounting prices. Click here to compare.