Understanding Invoice Finance

Size: px
Start display at page:

Download "Understanding Invoice Finance"

Transcription

1 Understanding Invoice Finance

2 Agenda Introduction ABFA Jargon Busting What is Invoice Finance Factoring Invoice Discounting Invoice Finance Products Who uses Invoice Finance? Main terms Advantages & Disadvantages Risk to Invoice Financier & Client Operating an Invoice Finance facility Case Study

3 Introduction Liam Baker Business Development Manager

4 ABFA Asset Based Finance Association - Voluntary trade association - Who are members? - Provides process for member inter-factor transfer* - Code of Conduct July 2013 Banks v Independent Financiers - How do they differ in the market? For more information, visit

5 Jargon Busting! The Invoice Finance industry is full of jargon How much of it would you be able to explain and understand?

6 What is Invoice Finance? Generates cash against unpaid invoices The most common facilities are Factoring and Invoice Discounting There are many other alternative invoice finance facilities.

7 What is Invoice Finance?

8 Invoice Finance Explained Step 1 The client invoices the debtor for goods sold. Client sends a copy of the invoice to the Invoice Financier. Service fee is deducted. Invoice Financier INVOICE Debtor COPY INVOICE Client

9 Invoice Finance Explained Step 2 Invoice Financier typically give the client up to 90% of the value of the invoice immediately. Invoice Financier 90% Debtor Client

10 Invoice Finance Explained Step 3 Invoice Financier can chase invoice payment from the debtor or the client may opt to chase themselves. Invoice Financier INVOICE CHASE Debtor Client

11 Invoice Finance Explained Step 4 The debtor pays the Invoice Financier the amount on the invoice in full either direct or into a trust account. Invoice Financier 100% Debtor Client

12 Invoice Finance Explained Step 5 Invoice Financier gives the client the remaining 10% Invoice Financier 10% Debtor Client

13 Invoice Finance Explained Invoice Finance Invoice Discounting Factoring Confidential Agency / CHOCC s Recruitment Finance Export Finance Bad Debt Protection International Collections Disclosed Purchase Funding Body Shop Finance Trade Finance

14 Factoring Explained There are a number of benefits which include: - Up to 90% cash injection into business - Full credit control and sales ledger management - Relevant, timely letters and statements to customers - Disclosed or confidential credit control function - Allocation of customer payments - Bad debt protection is available.

15 Invoice Discounting Explained Different to Factoring in that the client retains control of their sales ledger management and credit control activity. Benefits Include: - Client receives up to 90% advance of invoice value - Freedom for business to retain control of their sales ledger - Invoices financed can be domestic or export sales - Bad debt protection available - Typically a confidential facility.

16 Invoice Discounting Criteria Due to reliance on the client to perform essential activity, this product is suitable for: - Growing, profitable companies - Good internal systems and controls - Own Credit Control operation - Well maintained Sales Ledger - Good debt turn in relation to the industry - Accurate and timely management accounts.

17 Available Invoice Finance Products Contractual Finance Revolving Credit Confidential Trade Finance Spot Factoring Body Shop Finance Agency / CHOCC s Non Recourse / BDP Reverse Factoring Purchase Funding Export Finance Recruitment Finance

18 Who Uses Invoice Finance? Business Structures Key Sectors SOLE TRADER PARTNERSHIP LLP s LIMITED COMPANY PLC S Haulage Manufacturing Construction Services

19 Who Uses Invoice Finance? Businesses trading B2B From new starts to mature businesses Trading on credit terms Ideally Sell and Forget

20 Main Terms of an IF Agreement 1. Service charge (usually % of turnover) 2. Discount Charge - % above LIBOR/BASE 3. Prepayment % 4. Contract period (term + notice period) 5. Security required 6. Operating conditions / pre coms 7. Termination Fees 8. Inter Factor Transfer Process

21 Advantages & Disadvantages

22 IF vs. Overdraft What other benefits does IF provide which an Overdraft does not? - Service (i.e. credit control) - Flexibility - Lending criteria/reporting - Collateral security - Route during exit scenario (book debts) - Not repayable on demand

23 The Cash Benefit CASHFLOW WITHOUT INVOICE FINANCE Income Oct Nov Dec Jan Feb Mar Sales (invoices raised) Cash In* Total Income Total Expenditure Cash Balance c/f CASHFLOW WITH INVOICE FINANCE Income Oct Nov Dec Jan Feb Mar Sales (invoices raised) Cash In* Total Income Total Expenditure Cash Balance c/f

24 Risk to Invoice Financier / Client Unintentional and deliberate actions that may present risk to the invoice financier or client.

25 Risk to Invoice Financier / Client Unintentional Contra Trading Rebates Discounts Free Issue Material Liquidated Damages Concentrations & Debtor Quality Ban on Assignment Bad Debt/ adverse credit Appears on both debtor and creditor ledgers Retrospective charges made by the debtor, usually for volume Up front or retrospective Debtor supplies stock to client Potential non payment through breach of contract. Spread of exposure Debtor doesn t recognise factor

26 Risk to Invoice Financier Deliberate False Invoices Pre-invoicing Re-aging/Rolling Invoices No debt to collect - FRAUD Invoicing ahead of completion of contract of sale Crediting and reissue of aged or unapproved invoices Credit Note Suppression Banking of Receipts Collusion Funding non existent debt Client banks monies due to invoice financier Debtor collaborates with client

27 Operating an Invoice Finance Facility Operational Relationships Operating Platforms and Client Reports Client Reporting Availability Movement Additional Services and associated Costs Variations to Agreement

28 How the client receives money 1. Contract to an agreed prepayment % 2. Industry / Risk / Commercially driven % 3. Availability is calculated 4. Draw down (online system)

29 How the client receives money Contract to an agreed prepayment % Industry/Risk/Commercially driven % Availability is calculated Draw down online system How is the availability calculated?

30 You as the Client How can a facility be structured for you?

31 Learning Points - ABFA - Jargon Busting - What is Invoice Finance - Main Terms of an Invoice Finance agreement/ the offer letter - Suitability for Invoice Finance - Advantages & Disadvantages of an Invoice Finance facility - Invoice Finance v Overdraft - Risk to an Invoice Financier/Client - Operating an Invoice Finance facility

32 Any Questions?...

Understanding Invoice Finance

Understanding Invoice Finance Understanding Invoice Finance Introduction John Mackey Senior Business Development Manager Ronan Horgan Managing Director Content What is Invoice Finance? Industry Background Who can avail of Invoice Finance?

More information

First column=preferred terms. Bold and italics signifies other defined terms. Bold signifies alternate terms used.

First column=preferred terms. Bold and italics signifies other defined terms. Bold signifies alternate terms used. First column=preferred terms. Bold and italics signifies other defined terms. Bold signifies alternate terms used. 1= Governance; 2=Facilities and Products; 3 Charges; 4 Legal terms and security arrangements;

More information

Incisive Business Guide to Factoring

Incisive Business Guide to Factoring Incisive Guide to Factoring Factoring Guide Summary This guide from Incisive outlines the features and benefits for your business from using factoring and invoice discounting services. Factoring is commonly

More information

October 16 th & 17 th 2012

October 16 th & 17 th 2012 Enterprise Ireland Finance for Growth FX & Export Finance Workshop October 16 th & 17 th 2012 Michéal Doyle Area Head of Commercial Centres - AIB Commercial Banking A Relationship Model Aim to provide

More information

THE EUF GLOSSARY ON FACTORING AND COMMERCIAL FINANCE

THE EUF GLOSSARY ON FACTORING AND COMMERCIAL FINANCE Nom T THE EUF GLOSSARY ON FACTORING AND COMMERCIAL FINANCE Version 1.0 June 2012 A Common Terminology for the Industry The EUF Glossary on Factoring and Commercial Finance wishes to contribute to the establishment

More information

Invoice finance made simple

Invoice finance made simple Invoice finance made simple All you need to keep the cash flowing Your Invoice Finance Experts Your Invoice Finance Experts Contents This informative, easy-to-use guide has been put together to explain

More information

salesinvoices@leaseinvestment.com www.leaseinvestment.com Tel: +44871 237 4770 Fax: +44701 423 7002

salesinvoices@leaseinvestment.com www.leaseinvestment.com Tel: +44871 237 4770 Fax: +44701 423 7002 INVOICE DISCOUNTING, FACTORING & SALES LEDGER MANAGEMENT Selling your sales Invoices or outsourcing your sales ledger is one of the most complex techniques for business finance. Unfortunately, it is often

More information

DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works.

DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works. DEBTOR FINANCE: So you are interested in Debtor Finance but you re not exactly sure what it is or how it works. You need Debtor finance so that you can receive cash straight away to fuel your business

More information

Management of Risk, Mitigation strategies, Fraud, & Exit Strategies. Accra December2011

Management of Risk, Mitigation strategies, Fraud, & Exit Strategies. Accra December2011 Management of Risk, Mitigation strategies, Fraud, & Exit Strategies Accra December2011 Risk Management There are many aspects of risk in the factoring industry such as:- Paper Trail risk You buy debts

More information

NAVIGATOR A business overview and financial guide for stakeholders in the SME market

NAVIGATOR A business overview and financial guide for stakeholders in the SME market NAVIGATOR A business overview and financial guide for stakeholders in the SME market XYZ Limited ( the Company ) Report for ABC Bank plc ( the Bank ) XX July 2012 ABC Limited ( the Company ) Report for

More information

CIMA F3 Course Notes. Chapter 3. Short term finance

CIMA F3 Course Notes. Chapter 3. Short term finance CIMA F3 Course Notes c Chapter 3 Short term finance Personal use only - not licensed for use on courses 31 1. Conservative, Aggressive and Matching strategies There are three over-riding approaches to

More information

What is International Factoring?

What is International Factoring? What is International Factoring? Factoring is when a third-party firm, or factor, buys a business accounts receivable or specific invoices - giving the business a cash advance based on those unpaid bills.

More information

Invoice discounting User guide

Invoice discounting User guide Invoice discounting User guide 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

More information

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES

THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES THE CONCEPTUAL FRAMEWORK OF FACTORING ON SMALL AND MEDIUM ENTERPRISES Minaxi Rani Assistant Professor (Extn.), Department of Commerce, Govt. College for women P.G. College, Hisar, Haryana, (India) ABSTRACT

More information

INVOICE FINANCE. Cash flow solutions that support business growth

INVOICE FINANCE. Cash flow solutions that support business growth INVOICE FINANCE Cash flow solutions that support business growth 1 Contents Invoice Finance 3 Invoice Discounting 5 Factoring 6 How Factoring works 7 Payroll Finance 8 How Payroll Finance works 9 Additional

More information

IGCSE Business Studies revision notes Finance Neil.elrick@tes.tp.edu.tw

IGCSE Business Studies revision notes Finance Neil.elrick@tes.tp.edu.tw IGCSE FINANCE REVISION NOTES Table of contents Table of contents... 2 SOURCES OF FINANCE... 3 CASH FLOW... 5 HOW TO CALCULATE THE CASH BALANCE... 5 HOW TO WORK OUT THE CASH AVAILABLE TO THE BUSINESS...

More information

Sustainable financing solutions at times of crisis How to finance your business through factoring? Bucharest, October the 6-th, 2009

Sustainable financing solutions at times of crisis How to finance your business through factoring? Bucharest, October the 6-th, 2009 Sustainable financing solutions at times of crisis How to finance your business through factoring? Bucharest, October the 6-th, 2009 Dan Stoica, RomFactor 1 Agenda What is happening with companies in the

More information

Invoice Finance. Supporting business. Supporting growth. Call us 01 772 4488 Click on www.aib.ie/invoice-finance

Invoice Finance. Supporting business. Supporting growth. Call us 01 772 4488 Click on www.aib.ie/invoice-finance Invoice Finance Supporting business. Supporting growth. Call us 01 772 4488 Click on www.aib.ie/invoice-finance Contents 01 Invoice Finance Why Invoice Finance? Easy to operate How Invoice Finance works

More information

CHAPTER 27. Short-Term Financial Planning. Chapter Synopsis

CHAPTER 27. Short-Term Financial Planning. Chapter Synopsis CHAPTER 27 Short-Term Financial Planning Chapter Synopsis 27.1 Forecasting Short-Term Financing Needs The first step in short-term financial planning is to forecast the company s future cash flows. This

More information

PREPARING FINAL ACCOUNTS. part

PREPARING FINAL ACCOUNTS. part 15_1312MH_CH09 27/1/05 8:38 am Page 87 PREPARING part 3 FINAL ACCOUNTS 9 The final accounts of sole traders 10 Accounting principles, concepts and policies 11 Depreciation and fixed assets 12 Bad debts

More information

Factoring and Invoice Discounting A Discussion Document from Pegasus Funding Resources

Factoring and Invoice Discounting A Discussion Document from Pegasus Funding Resources Factoring and Invoice Discounting A Discussion Document from Pegasus Funding Resources What is Invoice Finance? Many businesses these days can be well run and fundamentally sound, yet constantly suffer

More information

Invoice Finance. Contents. Factoring and Invoicing Discounting 1. The Advantages 2

Invoice Finance. Contents. Factoring and Invoicing Discounting 1. The Advantages 2 Invoice Finance All businesses rely on receiving money for goods and services that they provide and if everyone paid their bills on time wouldn t life be much simpler! Invoice Finance is the means by which

More information

Standard Bank Talking Finance to Business

Standard Bank Talking Finance to Business Standard Bank Talking Finance to Business Agenda 1 Introduction Stage of business Cash flow management Financing solutions What do Bank s look at when considering a loan, and what can you do? Why are loans

More information

INSOLVENCY AND AVAILABLE OPTIONS

INSOLVENCY AND AVAILABLE OPTIONS INSOLVENCY AND AVAILABLE OPTIONS Corporations Act 2001 - Section 95A 95A Solvency and insolvency (1) A person is solvent if, and only if, the person is able to pay all the person's debts as and when they

More information

Subject. PAPER No. : Financial Management MODULE No. : Factoring services

Subject. PAPER No. : Financial Management MODULE No. : Factoring services Subject Paper No. and Title Module No. and Title Module Tag Paper No.8: Financial Management Module No. 36: Factoring services COM_P8_M36 TABLE OF CONTENTS 1. Learning outcomes 2. Introduction 3. Mode

More information

CHAPTER 8. Accounting for Receivables 5, 6, 7, 8, 9, 10, 11, 12, 13 5, 6, 7, 8, 9 14, 15, 16, 17 18, 19, 20, 21, 22 10, 11, 12, 13 13, 14, 15

CHAPTER 8. Accounting for Receivables 5, 6, 7, 8, 9, 10, 11, 12, 13 5, 6, 7, 8, 9 14, 15, 16, 17 18, 19, 20, 21, 22 10, 11, 12, 13 13, 14, 15 CHAPTER 8 Accounting for Receivables ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises Problems Set A Problems Set B 1. Record accounts receivable transactions. 1, 2,

More information

tutor2u Cash Management How and Why Businesses Need to Manage their Cash AS & A2 Business Studies PowerPoint Presentations 2005

tutor2u Cash Management How and Why Businesses Need to Manage their Cash AS & A2 Business Studies PowerPoint Presentations 2005 Cash Management How and Why Businesses Need to Manage their Cash AS & A2 Business Studies PowerPoint Presentations 2005 Importance of Cash (1) A business can exist for a while without making profits but

More information

A guide to business cash flow management

A guide to business cash flow management A guide to business cash flow management Contents 01. Cash flow management 01 02. Practical steps to managing cash flow 04 03. Improving everyday cash flow 06 04. How to manage cash flow surpluses and

More information

AGENDA ITEM XI: CONSUMER CREDIT

AGENDA ITEM XI: CONSUMER CREDIT SCREENING CHAPTER 28 Country Session: LEGAL BASIS LAW NO. 4077 ON CONSUMER PROTECTION AMENDED BY LAW NO. 4822 (OG No: 25048, 14 March 2003) Came into force on 14 June 2003 BY-LAW ON RULES AND PROCEDURES

More information

Managing Cashflow Guide

Managing Cashflow Guide Managing Cashflow Guide 1. Knowing your customer 2. Payment Terms 3. Invoicing 4. Chasing payment 5. Treating suppliers fairly 6. Credit Insurance 7. Financing options 8. When all else fails 9. When your

More information

BANKING UNIT POLICY DOCUMENTS

BANKING UNIT POLICY DOCUMENTS BANKING UNIT POLICY DOCUMENTS POLICY DOCUMENT ON THE REGULATORY PROVISIONS FOR THE UNDERTAKING OF LENDING ACTIVITIES BY INSTITUTIONS AUTHORISED UNDER THE FINANCIAL INSTITUTIONS ACT 1994 FACTORING FORFAITING

More information

ASSET BASED LENDERS STAYING AHEAD IN AN EVER-CHANGING MARKET FEATURING THE NEW BDO ABL MONITORING DASHBOARD

ASSET BASED LENDERS STAYING AHEAD IN AN EVER-CHANGING MARKET FEATURING THE NEW BDO ABL MONITORING DASHBOARD i ASSET BASED LENDERS STAYING AHEAD IN AN EVER-CHANGING MARKET FEATURING THE NEW BDO ABL MONITORING DASHBOARD ii CONTENT MEETING THE CHALLENGE 1 THE BDO ABL MONITORING DASHBOARD 2 THE BALANCE SHEET MARKET

More information

Promotion and Development of Factoring in Africa: Towards a Facilitative Legal and Regulatory Environment"

Promotion and Development of Factoring in Africa: Towards a Facilitative Legal and Regulatory Environment Promotion and Development of Factoring in Africa: Towards a Facilitative Legal and Regulatory Environment" Implementation of a Factoring Law in Africa The case of South Africa Presenter: Nick Hough CEO

More information

Sources of Finance. Andy South Business Partner Clydesdale Bank. Steve Merchant Head of Asset Based Lending Services Baker Tilly

Sources of Finance. Andy South Business Partner Clydesdale Bank. Steve Merchant Head of Asset Based Lending Services Baker Tilly Sources of Finance Andy South Business Partner Clydesdale Bank Steve Merchant Head of Asset Based Lending Services Baker Tilly Angus Rooms Invoice Finance Partner Clydesdale Bank What we will be covering?

More information

Know o ing Y o Y ur r Options s & How to Access Them

Know o ing Y o Y ur r Options s & How to Access Them Knowing Your Options & How to Access Them Funding Choices in Edinburgh & Scotland Type of Finance Investment Grants Loans Type of Finance Invoice Financing Owners Capital Cash From Profits Asset Finance

More information

Debtor Management (Relevant to PBE Paper II Management Accounting and Finance)

Debtor Management (Relevant to PBE Paper II Management Accounting and Finance) Debtor Management (Relevant to PBE Paper II Management Accounting and Finance) Eric Y.W. Leung, CUHK Business School, The Chinese University of Hong Kong Accounts receivable forms quite a significant part

More information

Agri Credit Clinic. New Entrants Work-Shop. Moorepark 25 th April 2013. Bank of Ireland is regulated by the Central Bank of Ireland

Agri Credit Clinic. New Entrants Work-Shop. Moorepark 25 th April 2013. Bank of Ireland is regulated by the Central Bank of Ireland Agri Credit Clinic New Entrants Work-Shop Moorepark 25 th April 2013 Bank of Ireland is regulated by the Central Bank of Ireland Pillars of the credit application process Pillar 1 The Foundation Business

More information

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of

Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Management of Accounts Receivable Meaning & Definitions Aspect of Credit Management Objectives of Accounts Receivables Management Advantages of Trade Debtors Management Costs of Maintaining Accounts Receivables

More information

CHAPTER 15 ACCOUNTS RECEIVABLE AND UNCOLLECTIBLE ACCOUNTS

CHAPTER 15 ACCOUNTS RECEIVABLE AND UNCOLLECTIBLE ACCOUNTS CHAPTER 15 ACCOUNTS RECEIVABLE AND UNCOLLECTIBLE ACCOUNTS Chapter Opener: Thinking Critically Uncollectible accounts can be estimated in a number of ways. Students might consider historical data on uncollected

More information

Management of Receivables

Management of Receivables Management of Receivables Different costs involved in maintaining the debtors: 1. Interest. 2. Discount. 3. Collection Charges. 4. Bad Debts. Different approaches of calculating Interest: Total Cost approach.(priority)

More information

Discounting, Factoring & Forfeiting

Discounting, Factoring & Forfeiting Discounting, Factoring & Forfeiting Introduction Bill Discounting Factoring- Meaning & Definition Modus Operandi Terms of Agreement Functions Types of Factoring Factoring Vs Discounting Cost of Factoring

More information

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org

NATURE OF FACTORING. www.factors-chain.com/home www.factoring.org NATURE OF FACTORING www.factors-chain.com/home www.factoring.org A US DEFINITION: a continuing arrangement between a factoring concern and the seller of goods or services on open account, pursuant to which

More information

The Nature, Elements and Importance of Working Capital

The Nature, Elements and Importance of Working Capital C. WORKING CAPITAL MANAGEMENT 1. The nature, elements and importance of working capital 2. Management of inventories, accounts receivable, accounts payable and cash 3. Determining working capital needs

More information

MARK SCHEME for the October/November 2008 question paper 0452 ACCOUNTING. 0452/03 Paper 3, maximum raw mark 100

MARK SCHEME for the October/November 2008 question paper 0452 ACCOUNTING. 0452/03 Paper 3, maximum raw mark 100 www.xtremepapers.com UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the October/November question paper 0452 ACCOUNTING 0452/03

More information

Finance for Business Growth

Finance for Business Growth Finance for Business Growth A Presentation by Clive Lewis, Head of Enterprise, Institute of Chartered Accountants in England & Wales (ICAEW) Finance for Growth Businesses Presentation will cover: Do you

More information

Guide to cash flow management

Guide to cash flow management Guide to cash flow management Cash flow management What is cash flow management? For a business to be successful, good cash flow management is crucial. Cash flow is the primary indicator of a business

More information

MARK SCHEME for the May/June 2007 question paper 0452 ACCOUNTING. 0452/03 Paper 3, maximum raw mark 100

MARK SCHEME for the May/June 2007 question paper 0452 ACCOUNTING. 0452/03 Paper 3, maximum raw mark 100 www.xtremepapers.com UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the May/June question paper 0452 ACCOUNTING 0452/03 Paper

More information

ASSET BASED FINANCE ASSOCIATION QUARTERLY STATISTICS TO JUNE 2014

ASSET BASED FINANCE ASSOCIATION QUARTERLY STATISTICS TO JUNE 2014 ASSET BASED FINANCE ASSOCIATION QUARTERLY STATISTICS TO JUNE 214 CONTENTS Page 1. List of contributors 1 2.1. Clients sales 2 2.2. Balances at the period end 3 2.3. Analysis of sole lender and syndicate

More information

Analysis One Code Desc. Transaction Amount. Fiscal Period

Analysis One Code Desc. Transaction Amount. Fiscal Period Analysis One Code Desc Transaction Amount Fiscal Period 57.63 Oct-12 12.13 Oct-12-38.90 Oct-12-773.00 Oct-12-800.00 Oct-12-187.00 Oct-12-82.00 Oct-12-82.00 Oct-12-110.00 Oct-12-1115.25 Oct-12-71.00 Oct-12-41.00

More information

Paper F3. Financial Accounting. Specimen Exam applicable from June 2014. Fundamentals Level Knowledge Module

Paper F3. Financial Accounting. Specimen Exam applicable from June 2014. Fundamentals Level Knowledge Module Fundamentals Level Knowledge Module Financial Accounting Specimen Exam applicable from June 2014 Time allowed: 2 hours This paper is divided into two sections: Section A ALL 35 questions are compulsory

More information

CHAPTER 18. Receivables CONTENTS

CHAPTER 18. Receivables CONTENTS CHAPTER 18 Receivables CONTENTS Demonstration problem 18.1 Doubtful debts net credit sales and ageing methods 18.2 Discounting and default of a bill receivable 18.3 Ageing of accounts receivable and adjustment

More information

Large Company Limited. Report and Accounts. 31 December 2009

Large Company Limited. Report and Accounts. 31 December 2009 Registered number 123456 Large Company Limited Report and Accounts 31 December 2009 Report and accounts Contents Page Company information 1 Directors' report 2 Statement of directors' responsibilities

More information

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS

18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS AND FINANCIAL LIABILITIES I. GENERAL PROVISIONS APPROVED by Resolution No. 11 of 27 October 2004 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 18 BUSINESS ACCOUNTING STANDARD FINANCIAL ASSETS

More information

PRE SHIPMENT AND POST SHIPMENT TRADE FINANCE

PRE SHIPMENT AND POST SHIPMENT TRADE FINANCE PRE SHIPMENT AND POST SHIPMENT TRADE FINANCE . THE BRICKS AND MORTAR TRAP Source: Scottish Pacific Business Finance (Pty) Ltd. Sydney, 2005 PRESENTED BY Dr PADDY McDOWELL 2 ESTABLISHING A LETTER OF CREDIT

More information

6.3 PROFIT AND LOSS AND BALANCE SHEETS. Simple Financial Calculations. Analysing Performance - The Balance Sheet. Analysing Performance

6.3 PROFIT AND LOSS AND BALANCE SHEETS. Simple Financial Calculations. Analysing Performance - The Balance Sheet. Analysing Performance 63 COSTS AND COSTING 6 PROFIT AND LOSS AND BALANCE SHEETS Simple Financial Calculations Analysing Performance - The Balance Sheet Analysing Performance Analysing Financial Performance Profit And Loss Forecast

More information

LESSON 13: FACTORING THEORETICAL FRAMEWORK

LESSON 13: FACTORING THEORETICAL FRAMEWORK LESSON 13: FACTORING THEORETICAL FRAMEWORK Lesson Objectives To understand the Concept of Factoring. Methodology of Factoring and Forfeiting. Types of factoring. Introduction Receivables constitute a significant

More information

Trade Credit in the UK Economy (1998-2012): An Exploratory Analysis of Company Accounts

Trade Credit in the UK Economy (1998-2012): An Exploratory Analysis of Company Accounts Trade Credit in the UK Economy (1998-2012): An Exploratory Analysis of Company Accounts Report Prepared By Nick Wilson Credit management Research Centre Leeds University Business School www.cmrc.co.uk

More information

Your guide to our services

Your guide to our services Your guide to our services Working together to help your clients Bibby Financial Services works with a strong and diverse network of financial intermediaries, such as finance brokers, insolvency practitioners,

More information

M Simpson Associates

M Simpson Associates M Simpson Associates A Straight Talking Consultancy Business specialists with the ability to see through the smoke and get to the bottom line quickly Exclusive Business Insight from M Simpson 1 2 3 4 INVOICE

More information

FACTORING / INVOICE DISCOUNT PROJECT FACT FIND Please complete this fact find electronically if possible and email to: enquiries@whiterosefinance.

FACTORING / INVOICE DISCOUNT PROJECT FACT FIND Please complete this fact find electronically if possible and email to: enquiries@whiterosefinance. This section for internal use. AFC / Professional Associate: E-mail: Date: 1. Company Details Company Name Nature of Business Business Address Telephone No Fax No Email Address Web URL Address Previous

More information

Factoring as an Alternative Trade Finance Instrument in a Competitive World

Factoring as an Alternative Trade Finance Instrument in a Competitive World Factoring as an Alternative Trade Finance Instrument in a Competitive World 22 November2013 Peter Brinsley Director, POINT FORWARD LTD Peter Brinsley - credentials 21 years in factoring Now a freelance

More information

A BUSINESS JARGON GUIDE FOR UK SMALL AND MEDIUM SIZED BUSINESSES

A BUSINESS JARGON GUIDE FOR UK SMALL AND MEDIUM SIZED BUSINESSES A BUSINESS JARGON GUIDE FOR UK SMALL AND MEDIUM SIZED BUSINESSES Contents 03 INTRODUCTION 04 BUSINESS JARGON: EXPLAINED 27 INDEX 2 Business Jargon Buster Introduction The world of business finance is notorious

More information

MARK SCHEME for the October/November 2011 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120

MARK SCHEME for the October/November 2011 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/23 Paper 2, maximum raw mark 120 www.xtremepapers.com UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the October/November question paper for the guidance of

More information

FINANCING FOR BUSINESS

FINANCING FOR BUSINESS FINANCING FOR BUSINESS The Swale Business Conference 2015 Gavin Coleman - Handelsbanken www.handelsbanken.co.uk/chatham Introduction Gavin Coleman Branch Manager Handelsbanken (Swale & Medway) 17 years

More information

NOTE ON LOAN CAPITAL MARKETS

NOTE ON LOAN CAPITAL MARKETS The structure and use of loan products Most businesses use one or more loan products. A company may have a syndicated loan, backstop, line of credit, standby letter of credit, bridge loan, mortgage, or

More information

Financing Your Business. 27 th May 2015 John Irwin Head of AIB SME Strategy & Enablement

Financing Your Business. 27 th May 2015 John Irwin Head of AIB SME Strategy & Enablement Financing Your Business 27 th May 2015 John Irwin Head of AIB SME Strategy & Enablement TARGET RETURNS Funding Provider Returns VS. Risk Private Equity c.25% Venture Capital c.25% Property c.10% - 12%

More information

Invoice Finance. Supporting business. Supporting growth. AIB Commercial Finance Limited

Invoice Finance. Supporting business. Supporting growth. AIB Commercial Finance Limited Invoice Finance Supporting business. Supporting growth AIB Commercial Finance Limited AIB Commercial Finance Limited Contact Us + 353 (0)1 772 4488 aibcashflow@aib.ie www.aib.ie/invoice-finance Invoice

More information

SOLE TRADER FINAL ACCOUNTS

SOLE TRADER FINAL ACCOUNTS 6 SOLE TRADER FINAL ACCOUNTS CASE STUDY Starting out in business Olivia Boulton used to work as a buyer of kitchen and cookware goods for a large department store in central London. She was good at her

More information

East Lancashire Chamber of Commerce International Trade Club - 20 July 2010

East Lancashire Chamber of Commerce International Trade Club - 20 July 2010 East Lancashire Chamber of Commerce International Trade Club - 20 July 2010 Export Finance & Introducing Chamber Invoice Finance Nigel Mills Director Strategic Markets Nigel Crosse Head of International

More information

Training Manual: The Basics of Financing Agriculture

Training Manual: The Basics of Financing Agriculture Training Manual: The Basics of Financing Agriculture Acknowledgement The Agriculture Finance Training Manual is part of AgriFin s Agriculture Finance Training Tools. The Manual was developed by IPC - Internationale

More information

Accounts of the sole trader

Accounts of the sole trader Unit 1 Accounts of the sole trader This unit consists of one section only: Section 1: Final accounts Section 1 Final accounts By the end of this section you should be able to: explain the position of a

More information

It is concerned with decisions relating to current assets and current liabilities

It is concerned with decisions relating to current assets and current liabilities It is concerned with decisions relating to current assets and current liabilities Best Buy Co, NA s largest consumer electronics retailer, has performed extremely well over the past decade. Its stock sold

More information

(a) Accounts Receivable... 23,000 Sales Revenue... 23,000. (b) Sales Returns and Allowances... 2,400 Accounts Receivable... 2,400

(a) Accounts Receivable... 23,000 Sales Revenue... 23,000. (b) Sales Returns and Allowances... 2,400 Accounts Receivable... 2,400 BRIEF EXERCISE 8-1 (a) Other receivables. (b) Notes receivable. (c) Accounts receivable. BRIEF EXERCISE 8-2 (a) Accounts Receivable... 23,000 Sales Revenue... 23,000 (b) Sales Returns and Allowances...

More information

Business Introducer Copy. Funding Solutions

Business Introducer Copy. Funding Solutions Business Introducer Copy Funding Solutions Benefits Why wait 30 days or more to get paid? We pay out up to 80% of the value of invoices raised within 24 hours Cash management is made easy with the ability

More information

A GUIDE TO INVOICE FINANCE

A GUIDE TO INVOICE FINANCE Invoice Finance Demystified A GUIDE TO INVOICE FINANCE IN IRELAND A Guide to Invoice Finance Overview Invoice finance: There are two main types of funding within invoice finance: Invoice Discounting and

More information

Teacher Resource Bank

Teacher Resource Bank Teacher Resource Bank GCE Accounting Other Guidance: Layouts and Formulae ACCN1: Layouts ACCN2: Layouts and Formulae ACCN4: Layouts and Formulae (Updated July 2012) The Assessment and Qualifications Alliance

More information

PRINCIPLES OF ACCOUNTS

PRINCIPLES OF ACCOUNTS PRINCIPLES OF ACCOUNTS OBJECTIVE The objective of the examination is to test candidates understanding of the basic principles and methods of accounting and their application to practical situations. THE

More information

Turn invoices into instant cash.

Turn invoices into instant cash. Turn invoices into instant cash. We put the capital in cash flow. 02 Most businesses find cash flow a juggle at one time or another. If your company offers credit terms to your customers, then waiting

More information

www.mfactors.co.za FACTORING TRADE FINANCE BRIDGING FINANCE

www.mfactors.co.za FACTORING TRADE FINANCE BRIDGING FINANCE www.mfactors.co.za FACTORING TRADE FINANCE BRIDGING FINANCE Who is Merchant Factors? Merchant Factors was founded in 1998 by our CEO, Johnny Philippou. It had become quite evident at the time that most

More information

Thames Water Utilities Cayman Finance Limited. Annual report and voluntary financial statements for the year ended 31 March 2009

Thames Water Utilities Cayman Finance Limited. Annual report and voluntary financial statements for the year ended 31 March 2009 Thames Water Utilities Cayman Finance Limited Annual report and voluntary financial statements for the year ended 31 March Registered no: MC-187772 (Cayman Islands) Thames Water Utilities Cayman Finance

More information

Non-Bank Debt Finance providers operating in Ireland. Date: Wednesday 10 th December 2014

Non-Bank Debt Finance providers operating in Ireland. Date: Wednesday 10 th December 2014 Non-Bank Debt Finance providers operating in Ireland Presented by: Tom Early Date: Wednesday 10 th December 2014 Understand the Banks Perspective Banks are concerned with REPAYMENT CAPACITY De-risking

More information

Article Accounting Terminology

Article Accounting Terminology Article Accounting Terminology Contents Page 1. Accounting Period... 4 2. Accounts Payable (Sundry Creditors)... 4 3. Accounts Receivable (Sundry Debtors)... 4 4. Assets... 4 5. Benchmarks... 4 6. B.O.S.

More information

Guide to Starting Self Employment or Business. Guide No.6 in the Tax Guide Series

Guide to Starting Self Employment or Business. Guide No.6 in the Tax Guide Series Guide to Starting Self Employment or Business Guide No.6 in the Tax Guide Series About This Guide This Guide has been prepared to help someone starting out in a new business or self employment venture

More information

NATIONAL 5 Accounting

NATIONAL 5 Accounting MADRAS COLLEGE FACULTY OF TECHNOLOGIES DEPARTMENT OF BUSINESS AND COMPUTING NATIONAL 5 Accounting Course Information ACCOUNTING NATIONAL 5 COURSE AIMS AND STRUCTURE The course aims to enable learners to:

More information

RECEIVABLES FINANCING

RECEIVABLES FINANCING RECEIVABLES FINANCING Asset-Based Financing Strategies 2015 Practising Law Institute February 27, 2015 Scott A.Lessne Crowell & Moring LLP I. The Role of Receivables in Asset- Based Lending A. What are

More information

Assessment Questions

Assessment Questions Assessment Questions AS-1 ( 1 ) Define accounts receivable. The amount billed to customers and owing from them but not yet collected. AS-2 ( 1 ) Describe the presentation of accounts receivable on the

More information

Non-Bank Debt Finance providers operating in Ireland

Non-Bank Debt Finance providers operating in Ireland Non-Bank Debt Finance providers operating in Ireland Presented by: Tom Early Enterprise Ireland Date: Tuesday 10 th February 2015 Understand the Banks Perspective Banks are concerned with REPAYMENT CAPACITY

More information

ACCOUNTING 1 (ACN101- M)

ACCOUNTING 1 (ACN101- M) 1 ACCOUNTING 1 (ACN101- M) STUDY UNIT 1: THE NATURE AND FUNCTION OF ACCOUNTING DEFINITION: Accounting can be defined as the orderly & systematic recording of the monetary values of financial transactions

More information

Gary Trueman Regional Director. Birmingham, Coventry and Warwickshire

Gary Trueman Regional Director. Birmingham, Coventry and Warwickshire Gary Trueman Regional Director Birmingham, Coventry and Warwickshire 1 Funding Funding What sources are available? How can we support you to get acce What can you do to support yourselv What can an SME

More information

Cost of Credit. How much is customer credit REALLY costing your business? Tips & advice for effective credit management

Cost of Credit. How much is customer credit REALLY costing your business? Tips & advice for effective credit management Cost of Credit How much is customer credit REALLY costing your business? Tips & advice for effective credit management Group UK The best advice any business can follow to ensure they do not experience

More information

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS.

Bill Discounting. Exporter. Importer BANKING AND TRADE FINANCE TUTORIAL. Importer s Bank. Exporters Bank INDIA FOREX ADVISORS. Bill Discounting While discounting a bill, the Bank purchases the bill receivable to the Exporter (i.e. Bill of Exchange or Promissory Note) before its due date and credits the value of the bill to the

More information

INTERNATIONAL ACCOUNTING STANDARDS. CIE Guidance for teachers of. 7110 Principles of Accounts and. 0452 Accounting

INTERNATIONAL ACCOUNTING STANDARDS. CIE Guidance for teachers of. 7110 Principles of Accounts and. 0452 Accounting www.xtremepapers.com INTERNATIONAL ACCOUNTING STANDARDS CIE Guidance for teachers of 7110 Principles of Accounts and 0452 Accounting 1 CONTENTS Introduction...3 Use of this document... 3 Users of financial

More information

Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less. Accounting Fundamentals Lesson 5 5.0 Receivables & Investments Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.

More information

The Merchant Securities FTSE 100. Hindsight II Note PRIVATE CLIENT ADVISORY

The Merchant Securities FTSE 100. Hindsight II Note PRIVATE CLIENT ADVISORY The Merchant Securities FTSE 100 Hindsight II Note Our first FTSE-100 Hindsight Note is now fully subscribed; however, as a result of exceptional investor demand we are launching the FTSE- 100 Hindsight

More information

If you can t pay your business debts when they become due or if the assets of your business are less than your debts, you are insolvent.

If you can t pay your business debts when they become due or if the assets of your business are less than your debts, you are insolvent. If you can t pay your business debts when they become due or if the assets of your business are less than your debts, you are insolvent. Insolvency can be a confusing subject involving many technical terms.

More information

6. Show all your workings. icpar

6. Show all your workings. icpar CERTIFIED PUBLIC ACCOUNTANT FOUNDATION LEVEL 1 EXAMINATION F1.3: FINANCIAL ACCOUNTING MONDAY: 10 JUNE 2013 INSTRUCTIONS: 1. Time Allowed: 3 hours 15 minutes (15 minutes reading and 3 hours writing). 2.

More information

Factoring Guide. Understanding the Principles

Factoring Guide. Understanding the Principles Factoring Guide Understanding the Principles This report introduces factoring topics that every factoring candidate should know. It provides a concise, easy to understand presentation of the factoring

More information

ebrief for freelancers and contractors Borrowing company money

ebrief for freelancers and contractors Borrowing company money ebrief for freelancers and contractors Borrowing company money The facts behind the Directors Loan Account Taking money from the business for personal use when trading as a partnership or sole trader is

More information

Capcon Holdings plc. Interim Report 2011. Unaudited interim results for the six months ended 31 March 2011

Capcon Holdings plc. Interim Report 2011. Unaudited interim results for the six months ended 31 March 2011 Capcon Holdings plc Interim Report 2011 Unaudited interim results for the six months ended 31 March 2011 Capcon Holdings plc ("Capcon" or the "Group"), the AIM listed investigations and risk management

More information