We understand that keeping a factoring business moving forward in the fast-paced, tech-driven world is quite challenging. It involves a plethora of complex and tedious tasks that are rather time-consuming. But the good news is that ZWEBB Fintech can help you out with that.
We offer a cutting-edge factoring solution capable of saving your precious time and making all your factoring processes more efficient, automated, and streamlined.
The invoice factoring platform produced by ZWEBB Fintech provides:
- Fully automated invoice factoring, invoice discounting, or reverse factoring
- Instant client registration with integrated online eID-verification
- Flexible KYC/KYB/AML integrated screening service
- API connectivity to external accounting, CRM, or core-banking systems
- Online, real-time price estimates directly on the platform
- On-premise or SaaS installations
- Quick time-to-market, 1-2 weeks
What is Factoring?
Selling and buying invoices is a type of factoring – companies sell or mortgage their unpaid customer invoices at a discount to you, a factor, in exchange for immediate cash. When using an online invoice factoring platform, suppliers are free to decide exactly which invoices to sell and the invoice prices are mainly decided based on these three factors:
- Credit risk
- Type of factoring arrangement
Recourse vs Non-Recourse Factoring
There are two different types of invoice factoring: recourse and non-recourse factoring. While both provide consistent cash flow, they differ in what happens if the invoices are not paid back by their due date.
Recourse factoring means that the selling company still takes the credit risk (standard factoring). Unpaid invoices must eventually be bought back by the supplier. Because of that, recourse factoring involves higher financial risk for the supplier compared to the non-recourse factoring. Recourse factoring comes with higher advances and lower factor fees when purchasing the invoices.
Non-recourse factoring (invoice discounting) means that the factor takes all the credit risk. This type of invoice factoring usually comes with lower advance rates and higher factor fees compared to the recourse factoring since the company selling the invoice avoids all the credit risk. Factoring without recourse is offered within the invoice discounting option to companies with good solvency.
Invoice financing is another way of using outstanding invoices to free up fast cash. Invoice financing means getting a loan where the security is made up of the outstanding invoices and incoming assets. The loan is then paid back with the funds that arrive when the invoices are paid. The company will still maintain the sales record, even though the money that comes in goes directly to the third party.
By selling their invoices, the supplier can receive the money from the invoices quickly and safely instead of waiting for customer payments for up to 30 or 90 days. In that way, the supplier can increase their cash flow, avoid administrative work connected to the invoices, increase liquidity and act quickly on new business opportunities. On the other hand, you, as a factor can make a profit by collecting the accounts receivable at a full price.
Some advantages of using factoring are:
- Increased liquid capital and freeing assets for new investments
- Spending less time on administrative work
- Getting fast and secure capital from outstanding invoices
Factoring and Invoice Discounting Platform Advantages
On the cloud-based factoring platform produced by ZWEBB Fintech, administrators can monitor all factoring and invoice discounting and observe the status of a large number of invoices at the same time.
Utilizing our cloud-based software will cut down on your administrative work, reduce your costs, and improve efficiency. This will ultimately scale your factoring business and empower it to thrive.
Are you looking for a Factoring platform software provider for your target market?
Please get in touch with ZWEBB Fintech by filling out the form below.