Accounting And Budget Planning - Close Brothers Invoice Finance

Transcription

1 Invoice discounting User guide

2 What is IDeal TM? IDeal TM is the ultimate invoice discounting facility. It has been specifically designed to release the cash tied up in your invoices, without the administration of a traditional invoice discounting facility. You remain in full control of maintaining your sales ledger, credit control and collection activities. Simply transfer your sales ledger to us electronically on a regular basis, using our secure, fully automated electronic link that works directly with your accounting system. You then use the link to request the funds that you require it s that simple. There is no need for any paperwork or monthly reconciliations, unlike traditional invoice discounting agreements. The facility can be completely confidential so that your customers are unaware of our involvement. IDeal TM from Close Brothers Invoice Finance gives you fast, flexible and cost effective access to the cash you require. It is very simple to operate, requiring minimal administration from your organisation. Fast, flexible and cost effective access to the cash you require. IDeal TM User guide V2.5 2

3 Contents Prior to commencement instructions 4 Logging-in 5 Home page 5 Upload area 6 Import file 7 Debtors 8 Open items 9 Soundings 10 Payment request 12 Reports 14 Trust account report 15 Other menu tabs 16 Customer correspondence 17 Our reports to you 18 Your reports to us 19 Funding restrictions 20 Additional charges 21 IDeal TM with bad debt protection 22 Credit limits 25 Asset based lending 29 IDeal TM associate companies groups and multicurrency funding 32 IDeal TM User guide V2.5 3

4 Prior to commencement instructions Thank you for selecting IDeal TM by Close Brothers Invoice Finance (CBIF). In order to ensure that the commencement of your facility and the first few weeks of live usage are as problem free as possible, please follow the instructions below. Debtor details Please ensure that your debtor details are fully up to date on your accounting solutions, including the full trading styles, addresses, post codes and telephone numbers. For clients using our IDeal TM with our bad debt protection (BDP) product, please ensure the correct trading terms are present on your accounting solution. Unallocated receipts and credit notes Please make sure that all credit notes and receipts are posted against the relevant invoices on your accounting package prior to commencement of your facility. Duplicate invoices Please check that your ledger does not contain any duplicate invoices, as the upload will be stopped if any are spotted. On the day of going live Please ensure that all your customer receipts (including receipts received on the day) are posted to your accounting package the day we go live. The extractor The extractor will not work without an internet connection and some of the system functionality can be affected if your internet provider has any upload restrictions on your network. If you change your server, PC, or accounting package you will require a new installation of the extractor at a cost of It is essential that you notify CBIF before you upgrade your accounting package. IDeal TM User guide V2.5 4

5 Logging-in Go to and enter the user name and password provided. Please note that if you create a shortcut, you will need to edit it as shown, otherwise you will be denied access to the system: Right click on the icon, select properties, delete the URL and then enter Please then apply and OK the changes before exiting. Home page Displays: Client name, client number, Facility, currency and availability. Use the options to navigate around the system. IDeal TM User guide V2.5 5

6 Upload area Clicking on the Upload option will transfer you to the file upload and debtor maintenance area. If your account is part of a group facility, you will have a menu displaying all the associate companies present in the group once you select upload. IDeal TM User guide V2.5 6

7 Import file Once you have extracted your sales ledger information from your accounting package, you then need to import it into the debtor maintenance area. If you import a file, which you then discover has an error in it, please contact your Client Manager. The data extraction is created by two methods: Your scheduled task (time to be agreed at install) By clicking on the CBIF bank report icon. This will be on the desk top of the computer the install was completed on Please note that only the data entered on your account package before the report date, in this example , will be included in the import. Every import you create, will have to be submitted via the Open Item screen. Auto import IDeal TM now has the ability to auto import your file, this will not be suitable for every customer. Please discuss this feature with your Client Manager. IDeal TM User guide V2.5 7

8 Debtors Select a customer by clicking on the name. From here you can non-notify debtor accounts or invoices from assignment (this can also be done using the drop down, left). To register your change, select change. The notified status will change from notified to non-notified. Every time a new debtor is imported to IDeal TM, you will be forced to review the notification before you can submit to CBIF. NB. Please note that these non-notified items must have been previously specified within your agreement or specifically agreed with your Client Manager. You should also only ever re-notify accounts with the prior agreement of your Client Manager. IDeal TM User guide V2.5 8

9 Open items Once you are satisfied that you have non-notified all the correct accounts, you then have to submit the file to IDeal TM. This page will show every invoice in the file, with non-notified invoices displayed down the bottom of the page. Click Submit your file to CBIF, you will then be directed to the home page and your availability will be updated accordingly. Please note that you can only submit each extraction once. This data can also be exported to Excel for your convenience. Auto submit The Auto file submit feature can be switched on if required. The file will be generated by the schedule task set up on your PC. The system will then auto import and submit the file. If the file contains a new debtor account, the auto submit will be stopped and you will be notified by so that you can review the status of that new account. If the file contains existing debtors only, it will auto submit. We will send you notification as confirmation. IDeal TM User guide V2.5 9

10 Soundings If you have any outstanding soundings, they will be highlighted as opposite. Your Client Manager could at any point stop a payment, if you have an incomplete Sounding. IDeal TM User guide V2.5 10

11 Select the Sounding tab and the details of the required information will be displayed. Please forward a copy of the invoice/credit note, along with the order and proof of delivery to your Client Manager or Client Executive. Once this documentation has been received the sounding will be closed. Please note that funding will be removed on any item if the Sounding is not completed within specific period. You will also be subject to remittance and adjustment sounding requests. Please forward to your Client Manager or Client Executive a copy of the third party remittance advice for the remittance requests and any supporting paperwork for the accounting adjustment you have made. Your prepayment requests are subject to the completion of outstanding Soundings. IDeal TM User guide V2.5 11

12 Payment requests Prepayment is the percentage of your invoice value we make available to you. We can make payments to you in the following ways: By BACS A transfer direct to your bank at no charge, cleared funds are normally received at your bank within three working days. By CHAPS This is an electronic transfer directly into your bank account on the day of request utilising the CHAPS system. There is a charge for this service to cover administration. Your availability is the amount of funds that you can draw. You can view and request your availability, through IDeal TM. If you use IDeal TM with multicurrency facilities please be aware that the availability shown is the consolidated base currency. This is exchanged into the currency selected from the drop down menu. Please note that the that the discount calculation does not offset between the current accounts, each is calculated independently. Requests for prepayments must be received by us before 11.00am (for same day Chaps payments) or up to 1.45pm (for BACS payments). All CHAPS prepayment requested after 11am will be processed on the next working day, unless they are specifically approved by your Client Manager. IDeal TM User guide V2.5 12

13 Availability Select show breakdown by facility to see a more detail breakdown of the availability. This includes the memorandum, which details the last movements on your facility. IDeal TM User guide V2.5 13

14 Reports The following reports are available for download: Client Statement Details the current account movements for the month. IDeal TM User guide V2.5 14

15 Trust Account report This displays details of the receipts paid into the Trust Account on the previous day. This is updated every working day at 9.00am and should be used to post to your accounting package. If you post any items to your accounting package that are not on the receipts report please notify your Client Manager. Any receipts not posted directly to your trust account will be displayed in this area as Manual Trust transactions. These may appear throughout the day. IDeal TM User guide V2.5 15

16 Other menu tabs Recoursed This area displays the recoursed invoices, items marked Y are recoursed and items marked L are large recoursed i.e. more than 50% of the account balance is recoursed, so funding is removed on the whole account. Non-notifiables This area displays the non-notified invoices. Non-notified invoices are invoices excluded for your agreement. Funds for these invoices should not be paid into your CBIF trust account. There are two ways for an invoice to be non-notified: Our Client has non-notified the item at invoice or debtor level CBIF has non-notified at invoice or debtor level Disapproved This area displays the disapproved invoices. These are invoices on which the funding has been removed, funds for these invoices must still be paid into the CBIF trust account. Your workflow will inform you if any items have been made disapproved. There are two ways for an invoice to be disapproved: CBIF has disapproved at invoice or debtor level System disapproval Contra reserve Where a customer is also a supplier as shown on your sales ledger and purchase ledger, a reserve will be held in respect of the potential set-off. This is updated each time you upload. Fees This area displays any fees posted to your current account. N.B. This does not include the discount charge. Concentration and funding limit retention This area provides a detailed breakdown of your concentration and funding limit retentions. Debtor Here you can view your debtor balances. Workflow The workflow area will keep you informed of the following: The status of your payment, if it has been approved or is still subject to approval Any disapproved invoices If your ledger has been successfully processed Change password This area allows you change your IDeal TM password, if you forget your password, please contact your Client Manager. Paying-in book Select this option to create a Paying-in book request. IDeal TM User guide V2.5 16

17 Customer correspondence Cash collections In the normal course of business you will carry out your own sales ledger management and credit control. All monies collected relating to invoices assigned and notified to us need to be paid into the trust account using the Trust Account Paying-in book. Trust Accounts A Trust Account is a Close Brothers Invoice Finance bank account in your company name but controlled by CBIF. Trust Accounts are opened for your customers to pay directly into under the terms and conditions of your agreement with us. We will supply you with paying-in books for the banking of any cheques you receive in respect of your sales invoices. We are able to access daily activity reports from our bank relating to any transactions on Trust Accounts. All bankings from your customers, providing required information has been received, will be processed onto your account before 9.00am following receipt into the trust account. The balance of entitlement on these then becomes available for you to draw against, once you have posted your receipts to your accounting package and provided us with a fresh import. Please note that whenever possible you should use the paying-in book that we provide. All of your customers wishing to pay by BACS, CHAPS, SWIFT etc. must make all future payments to the Trust Account. Please provide them with the Trust Account bank details, IBAN numbers can be provided, as soon as your facility commences. Should any customer not pay into the Trust Account for invoices assigned to us you MUST repay, via the trust account, to Close Brothers Invoice Finance immediately on receipt. IDeal TM User guide V2.5 17

18 Our reports to you Daily reports Cash acknowledgement A copy of your Trust Account Statement will be updated daily in the reports area. This statement will include all transactions including any BACS, CHAPS, SWIFT etc being receipts from your customers as they are received. 1 Returned cheques If we receive notification from the bank that a customer s cheque has not been honoured we will send you the original cheque, as returned to us by the bank and a deduction will be applied to your account with us immediately. Please note that for each cheque that is returned, your account will be debited with the current bank charge for returned cheques. Each time you receive replacement funds you must inform us. Monthly reports Current account The current account balance shows the total advanced to you (including our charges), less any collections from your customers. The following types of entry will be found in this account: Payments (from us to you) Cash (received by us from your customers) Discounting charges Debit notes (sundry discounting charges paid by you) 1 Please note that bank statements will only be generated on receipt of funds. IDeal TM User guide V2.5 18

19 Your reports to us Regular financial reporting As detailed in your facility offer letter, we expect to receive regular Management and Audited Accounts within the period specified. These are required no later than the final day of each following month. Management Accounts to include a Balance Sheet and Profit and Loss Account. Periodic audits You will receive regular visits from members of our Audit team to review your accounting records. Our Auditors will also conduct an invoice and account verification either during or immediately following each Audit. Audit requirements will differ from visit to visit. However, the prime requirements will remain the same. Our Auditor will require access to month/period end information in respect of the following: Sales Ledger (including a month/period end Aged Customers Listing) Sales Invoices/Orders/Delivery confirmations Purchase Ledger (including an Aged Creditors Listing) Purchase Invoices/Orders Cash Book Bank Statements VAT Returns PAYE Returns Trial Balance/Management Accounts IDeal TM User guide V2.5 19

20 Funding restrictions There are a number of reasons why Close Brothers Invoice Finance will hold invoices on reserve (i.e. disapproved for funding). These are included below. Invoice past recourse All IDeal TM users should remain disciplined in pursuing collections. Debt that remains unpaid beyond the recourse period will be held on reserve until payment of the invoices is received. Additionally, if more than 50% of the total balance due from a customer falls into the recourse element we will hold a reserve against all the debt from that customer. Funding limits If a customer balance exceeds a concentration limit, the balance exceeding the limit will be held as a concentration reserve. This will be re-calculated each time you upload. We reserve the right to credit check any customer balance in excess of 10% of the funded sales ledger or 25,000. In addition, if Close Brothers Invoice Finance obtains poor credit information on a customer, a discretionary reserve may be applied. Invalid invoices Upon receipt of your notification of invoices, some may be held on reserve. Reasons may include: No proof of delivery Future dating of invoice Reconciliation retention A reserve in respect of any difference between the value of debtor payments posted to your sales ledger, and the value of the debtor payments received into your trust account. Returned cheques (RD) If a customer s cheque is returned we will process a deduction. Reporting requirements As outlined previously, we require specific information on a regular basis. Should this information be delayed then discretionary restrictions may be applied. Contra Where a customer is also a supplier as shown on your Sales Ledger and Purchase Ledger a reserve will be held in respect of the potential set-off. IDeal TM User guide V2.5 20

21 Additional charges Your administration charge covers all the day to day costs of operating your facility within the agreed terms. The following is a list of additional charges for services that are not included within your administration charge. Client payments Payment made by BACS No Fee interest will accrue from day payment is made Payments made by TT 27 / 40 +VAT ROI Overpayments Growth finance This facility is available to clients for periods between 3 and 6 months in order to provide additional funds to aid growth. Please contact your Client Manager for further details. Overpayments no greater than 5% increase in initial payment 1% (Minimum fee 150 / 175 +VAT ROI) of agreed payment We can consider other requests by arrangement with your Client Manager but extra security may sometimes be required. Facility reviews Increase in refer limit 1% of increase Increase in prepayment 1% of increase in availability (minimum fee 250 / 290 +VAT ROI) Increase in customer concentration 1% of increase in availability (minimum fee 250 / 290 +VAT ROI) Customer legal First legal letter 50 / 60 +VAT ROI action disclosed Action beyond first legal letter Subject to any solicitors fees plus a 20% discounting only handling charge Installation fees First installation 125 / 150 +VAT ROI Repeat installation 125 / 150 +VAT ROI Legal Charge / debenture / caveat registration 160 / 200 +VAT ROI ( 350 Scotland) documentation Other legal fees As incurred plus a discretionary 20% handling charge Other Reassignment charges As per your agreement Special clearance of cheques 30 per cheque / 35 +VAT ROI Dishonoured cheques 3.50 per cheque / 4 +VAT ROI Processing charge per Bill of Exchange 15 / 18 +VAT ROI per Bill of Exchange Adhoc reports 25 / 30 +VAT ROI IDeal TM User guide V2.5 21

22 IDeal TM with bad debt protection This applies to clients who have a IDeal TM with bad debt protection. How it works It is necessary for you to apply for credit limits on new and existing customers. Once we have approved the credit limit the value of the limit is notified to you. New credit limits or any adjustments to your existing credit limits will be advised to you via the IDeal TM system and a credit limit adjustment report, (see page 25). Under our bad debt protection agreement, credit limits on accounts with invoices 60 days past their due date must be removed. This may be reviewed in situations where the overdue status of the account is deemed to be non-adverse. You will be able to view current credit limits through IDeal TM by clicking on the menu item Credit Limit. Responsibilities It remains your responsibility to ensure full compliance within the confines of the Debt Purchase Agreement and bad debt protection being offered. Non compliance issues would include (but are not limited to) the following: Incorrect principal to contract being invoiced. Invoices and all supporting documentation must accurately reflect the correct principal to contract, terms of trade agreed and be consistent with the information held on our systems and the statements being sent to your customers Agreement (without the prior authorisation of Close Brothers Invoice Finance) of extended or varied terms of trade above and beyond the standard terms as documented in our agreement Incomplete supporting documentation (e.g. purchase orders, signed time sheets etc) Inadequate collection activity/credit control notes No valid contract between you and your customer Failure to report overdue accounts/adverse information to Close Brothers Invoice Finance Failure to report proposed repayment schedule to Close Brothers Invoice Finance Failure to complete the mandatory 60 day overdue debt report by the last working day of the month IDeal TM User guide V2.5 22

23 The following will help to explain the level of bad debt protection you will benefit from in the event of a bad debt. If you trade within the set credit limit, for example: Credit limit of 40,000 Invoices totalling 40,000 Client s first loss 1,000 Upon insolvency of the customer, we would pay out 40,000, less the VAT, less the first loss If you decide to trade above the set credit limit, for example: Credit limit of 40,000 Invoices totalling 80,000 Client s first loss 1,000 Upon insolvency of the customer, we would pay out 40,000, less the VAT, less the first loss Important notice If a credit limit has been removed, any credit notes or payments received are allocated to the approved items first, e.g: Credit limit 0 (was 10,000 but has now been removed) Invoices totalling 50,000 ( 10,000 of which is approved and 40,000 unapproved) A payment of 5,000 has subsequently been received so our exposure is now 5,000 and yours would remain at 40,000 (excluding the first loss). Total balance reduced to 45,000. If no credit limit is granted, for example: Credit limit of 0 Invoices totalling 40,000 Client s first loss 1,000 The debt is completely at your risk; no bad debt protection is provided IDeal TM User guide V2.5 23

24 Protected facilities only Credit limit codes Number codes: The final digit(s) on the credit limit value acts solely as a code and denotes the following:- 0 Permitted limit without qualification 1 Limit for prepayment purposes only 2 Interim limit further information has been requested in order to consider your full limit requirement 3 Limit as fixed current information does not support an increase 4 Limit given pending payment experience 5 Latest audited accounts, due to be filed, are required in order to consider an increased credit limit 6 Please approach the customer s bank for a status enquiry 7 We are unable to verify your debtor s trading style. Would you please provide us with a recent purchase order or letterhead so we can investigate and obtain the information needed to consider your credit limit request 8 Maximum credit limit 9 Insufficient information available upon which to base a decision 10 Limit reduced due to non-usage IDeal TM User guide V2.5 24

25 Credit limit adjustment report Each time a credit limit is amended on one of your customer accounts the following report will be posted to you. IDeal TM User guide V2.5 25

26 What is a credit limit? A credit limit is the monetary value of bad debt protection applied to a specific customer account. Credit limits must be approved by our Credit Team who have access to a wealth of credit and financial information. In addition to providing credit management we aim to provide you with the maximum amount of bad debt protection in line with your requirements. However, credit limit decisions are always subject to the current information to hand. Disclosure You are obliged to let us know if any of your customers are in financial difficulty or if you are aware of any detrimental information. Such information would include (but is not limited to) proposed repayment schedules, dishonoured cheques and/or requests for extended terms of trade etc. Failure to do so where bad debt protection is provided, may render the cover invalid. Close Brothers Invoice Finance has the right to examine, at any time, or take copies of, letters, accounts or other documents relating to any transactions between you and your customers. Upon request, you must take all reasonable steps to obtain for Close Brothers Invoice Finance such documents that may be in the hands of a third party. Removal of credit limits We reserve the right to withdraw limits particularly in situations where we are in receipt of adverse information. Once a credit limit is withdrawn, any future notification of invoices will be unapproved for bad debt protection. Please note that at the time of any given credit limit being withdrawn, any balance/invoices exceeding the authorised credit limit will not benefit from bad debt protection. Accordingly, any such balance will be deemed as unapproved. Reasons for credit limit removal There are a number of reasons why limits could be withdrawn. These include (but are not limited to) the following: Overdue customer account Customer ceased to trade Customer liquidation, insolvency, CVA or bankruptcy Cash flow difficulties Meeting of creditors called Petition to wind up noted Customer account passed to our recoveries department for legal action Upon discovery of a contra or stage payments (including post-dated cheques) Dishonoured or unpaid cheques Litigation is required what to do: Should the need arise for litigation we will discuss the various options open to you. This will be prior to any action being taken in order to pursue collection of overdue debts. Your Client Manager will usually discuss this with you but it may be our Litigation Manager that contacts you. Please note, we do not ordinarily take action against a disputed account. Claims In the event of the failure of a customer, where a credit limit has been sanctioned, it will be necessary for you to make a claim. In addition to completing a claim form, we will require all relevant supporting documentation e.g. copy invoices, proof of delivery, purchase orders and written proof of your credit control/collections activity to date. Disputed accounts are normally excluded from any potential claims. Please note that all claims remain subject to your first loss as detailed in your Debt Purchase Agreement. In conjunction with your Debt Purchase Agreement you agree to observe and comply with all of our requirements with regard to the methods of collecting and enforcing debts. Credit control/collection activity methods must include regular and diligent customer contact (both written and verbal), recorded in the form of chronological notes for the past twelve months. If less than a year, since the first date of trade with the said customer. IDeal TM User guide V2.5 26

27 Applying for a credit limit Within the Credit Limit menu select New Credit Limit Application. Use the find existing customer search to select the required account. Once you have submitted your credit application, our credit team will assess the customer and grant a decision within twenty four hours. To increase an existing credit limit, select the customer by clicking on the application ID and submit your request. IDeal TM User guide V2.5 27

28 Overdue debt form Once an invoice becomes greater than 60 days overdue, an overdue debt report will be created. It is your responsibility to advise the reason for non payment of the outstanding items. Each time you upload with these items still outstanding, a new report will be created. You will however only need to submit a report once on each overdue debtor, that is unless you have a collections update for us. This mandatory report must be completed by the last working day of the month. To do this, select Overdue Debtors, then go into the report you would like to update. Enter the details and then submit the file to the Credit Team. You do have the option to save your report and submit it on a later occasion. IDeal TM User guide V2.5 28

29 Asset based lending Many businesses require increased working capital to fund growth or assist with achieving strategic objectives such as a merger, acquisition or a management buy-out. Whatever the requirement, asset based lending (ABL) works alongside our invoice finance solutions and releases additional capital currently tied up in stock, property or plant and machinery. ABL features are now present within the IDeal platform to support customers with stock or property finance. Stock finance You are required to complete the stock return on a monthly basis. We must stress the importance of sending in the return in the agreed timescale, otherwise failure to do so could result in the removal of funding from the facility. The data you provide will be entered into IDeal by our team in order to calculate your funding. Please note your stock finance has its own charging structure. Property/term loan We will enter the value of your property/term loan into the system and your funding amount will be calculated against this value. Your facility has its own charging structure and a repayment schedule can be agreed accordingly. Please note each facility you have in place will have an independent current account which won t offset for discount calculation. IDeal TM User guide V2.5 29

30 Stock finance IDeal TM User guide V2.5 30

31 Property/term loan IDeal TM User guide V2.5 31

32 IDeal TM associate companies, groups and multicurrency funding IDeal TM has the ability to group together separate legal entities in a single facility with one secure login. Your group facility will be given a five digit client number, each company within the group will be given an associate number. Each associate may have multicurrency and multi product facilities. As a result of this grouping the system will be able to provide automated funding and charging calculations across groups of companies. You will be able to view data from both companies within one login, even though it may come from multiple sources. A single refer limit will be applied across the entire group, but funding may be capped at a facility level. When you first go to the availability page the figures you see are the combined company availability for each company in the base currency. If you then select Show breakdown by facility, you will see the breakdown of the calculation by currency. You can draw payments across multicurrency facilities by selecting the facility in the payment drop down, the value displayed is the consolidated availability in the currency you have select. Please note each facility you have will have an independent current account, these currency accounts do not offset for discount calculations. IDeal TM User guide V2.5 32

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35 Close Brothers Invoice Finance is a trading style of Close Invoice Finance Limited ( CIFL ), a subsidiary of Close Brothers Limited. CIFL is registered in England and Wales with company number and registered office at 10 Crown Place, London EC2A 4FT.