what-is-invoice-financing Carbon Group Perth

What Is Invoice Financing

Should you be using invoice financing as part of your business operations? Read on to find out more about invoice financing and how it can drive your business forward.

Invoice financing describes the process of asset based lending, giving companies finance while they wait for slow-paying receivables. Invoice finance allows businesses to borrow money based on sales assets, creating a revolving line of credit. This credit helps business owners to keep on top of cash flow, pay employees and reinvest in company operations without adding any extra liabilities. You are also able to reduce finance costs quickly and easily by making a payment and re-drawing money as and when your business needs it.

Put simply, invoice financing uses the money owed to you to finance your business in between client payments. There are many great reasons to use invoice financing, such as:

  • Your credit line is tied to your sales, meaning you won’t add any extra debts to your account
  • You won’t need to offer any property as security to finance your business
  • Your personal assets are separated from your business
  • No weekly/monthly repayments
  • Your line of credit grows as your business does, allowing you to do more when the time is right

As well as being tailored to your business needs, invoice financing gives your business greater flexibility and allows you to manage your cash flow more effectively.

Invoice Financing in a Digital Space

As technology has advanced there has been a rise in the use of cloud accounting and online invoice financing. With helpful features and real time data, cloud-based technology has revolutionised how businesses manage their accounts and finance.

Now that we are all better connected, it is much easier to keep on top of payments and payees using apps and cloud storage online. Working in real-time, these types of online accounting software programs, such as Waddle, Xero and MYOB allow you access to automated funding that instantly updates your line of credit and live bookkeeping that keeps an account of your transactions.

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