What are the advantages of Invoice Discounting?

Are you in two minds about whether you should go with invoice discounting or not? We'll put your mind at ease. Here are a few advantages of invoice discounting for you to consider:

Quick Cash

In this world of instant everything, invoice discounting is one such method where you can procure cash, quickly, as opposed to taking a bank loan. Your business is given access to liquid cash as soon as you release your invoice. Your sales receivables are converted into cash which in turn accelerates your cash inflow.

Improves Cash Flow

Since you receive an 85% advance invoice amount, this amount can be converted into cash which can be used to aid shorter working capital cycles. Thus, improving your cash flow.

Releases Locked Cash

When your cash has been locked in customer invoices for a long period, you do not have access to it. Invoice discounting releases this cash and converts your business' account receivable into liquid cash.

No asset as collateral

Invoice discounting can get you cash without turning any of your assets into collateral. This is because only the invoices where customers are yet to pay are submitted for the transaction.

Reduced collection period

The time taken by accounts receivables to release into liquid cash is the collection period; it is the credit period that is allowed. Invoice discounting provides the finances immediately, hence you don't have to wait around for the invoice to be cleared.


The seller has the sole right to manage the deal negotiations, credit terms, collect payments, etc.

Allows more room for credit sales

The company can choose how they want to grow its sales. Liquidity will never be an issue if you are following the invoice discounting process.


Confidentiality will be maintained by the discounting houses. The suppliers and the customers don't need to know whether the company is part of invoice discounting or not. This agreement is not disclosed to your customers.

No effect on business relations

Since the discounting company has no contact with the buyer, the relationship between the seller and the buyer will not be hampered.

Win-win situation for business

While the borrowing company gets the cash it's been waiting for, the customer will be given the credit period. This brings about a win-win situation for everyone involved in this process. Here are the advantages of invoice discounting. Honestly, what else are you waiting for? Hurry up and register on www.invoicetrades.com.