Guide Book to Factoring 1
Contents Welcome 3 Our Aim 4 Introduction 5 New Customers 6 Submitting your invoices and credit 7 notes Calculating your availability 8 Disapprovals for funding 9 Funding 10 Credit control and collection 11 Customer statements and end of month 12 Accessing your on line account ( Client 13 Access ) Reports 14 Analyzing your account 16 Accounting 17 Appendix 1- Details of Customers 18 Appendix 2- Introductory letter Appendix 3 Debt Schedule 19 20 2
Welcome We are delighted that you have chosen to work with Bibby Financial Services (Singapore) and would like to take this opportunity to welcome you on board. Our aim is to support your business by providing you a flexible funding facility. Tailored to your individual needs, with the highest level of client service and in doing so, help your business reach its full potential. This guide has been designed to be a simple, easy to use reference which we hope will provide you and your staff with a greater understanding of the nature of our relationship and the administration and processes that underpin it. We look forward to working with you to help you achieve your business goals. 3
Our Aim Our aim is to help small and medium sized enterprises realized their full potential by providing flexible funding solutions. 4
Introduction Bibby Financial Services (BFS) is a leading global specialist provider of cash flow solutions to small and medium sized enterprises worldwide. We are part of the Bibby Line Group, a dynamic, family owned UK business services provider with origins in shipping dating back over 200 years to 1807. Over 25 years, BFS has become the largest global independent specialist provider of invoice finance solutions, helping over 4,000 clients worldwide and gaining a reputation for flexibility and service. BFS operates in 15 countries worldwide, ensuring we are locally responsive whilst enjoying the benefits of global strength and experience. Invoice/Receivable finance is the generic terms given to a range of funding facilities which help SME improve control over cash flow and release working capital by unlocking cash from unpaid invoices. In addition to funding, we can also provide account receivable management services, cash application, undertake collections and provide full and accurate reporting on the sales ledger, saving valuable management time so you can get on with the job of managing and growing your business. 5
New Customers Before you can proceed with the facility, you will need to submit a New Customer Data Sheet to provide us information about your new customer. To submit your new customer data you will need to log into your Client Access and select new customer details from the menu. This page will detail how to load your customer data directly to our system. Alternatively you can fill in the customer data form attached in the Appendix 1. Note: When preparing your customer data for upload, you will need to save it in CSV format. It is important that this form contain the correct information to ensure that there are no delays in processing and that correct funding or credit limit is made available to you. Introductory letter When you take on a new customer, we will automatically send a letter to the new customer to introduce ourselves and inform them of the nature of our relationship. We may also require you to send the introductory letter yourself. A copy of the letter is attached in the Appendix 2 for your reference. 6
Submitting invoices and credit notes Under the term of the facility, you will need to stamp the assignment legend on the invoices as follows: Stamping legend your invoices. In all your invoices you must stamp the following legends: "The debt arising from this invoice has been assigned to Bibby Financial Services (Singapore) Pte Ltd. Payment should be made to BIBBY FINANCIAL SERVICES (SINGAPORE) PTE LTD. For payment by cheque, please send to 6 Shenton Way #18-08A Tower 2 Singapore 068809. For bank transfer, please remit payment to Standard Chartered Bank; Account No. 010-256474-4 (for SGD payment). Quoting as a reference your supplier s name and invoice number. If this invoice is found to be incorrect in any respect, please notify Bibby Financial Services (Singapore) Pte Ltd immediately." We will provide you with the rubber stamp. Submitting invoices and credit notes To submit your invoices, and credit notes you will need to log on in to your Client Access and select submit invoice or to submit schedule. The webpage will detail how to submit your invoices/credit notes or upload your invoices/credit notes directly into our system and outline the supporting documentation to accompany the data. Thereafter, you must submit copy of invoices/credit note and the supporting documents to us together with the signed Debt Schedule as attached in Appendix 3. 7
Calculating your availability When you submit invoices and credit notes to us, we will process your schedule. However, we will fund the available for draw down subject to our due diligence and our receipt of the copy of the invoices/ credit note and the supporting documents. The amount available is show in the following example: Total invoices assigned $100,000 Less total disapproved debt* $10,000 Approved sales ledger balance $90,000 Advance available (70%) $63,000 Less existing current account balance $20,000 Funds available for advance $43,000 This example is a simplified calculation of your availability for illustrative purposes. Actual availability differs from client to client based on the conditions of the facility. * see disapproval 8
Disapprovals for funding In the course of your facility, some invoices may be disapproved for funding. The followings are some of the reasons for disapproval: Ageing Invoices will be disapproved when they reached the recourse period (financing period). Customer Funding limit/credit limit Funding limit/credit limit is set for each customer. Invoices exceeding the funding/credit limit will be disapproved. Concentration limit A concentration limit will have been agreed with you prior to the commencement of your facility. If the total amount of the invoices submitted to us for any debtor is greater than this limit, the amount above the limit will be disapproved until the total value of invoices to this debtor become lower than this limit. Customer disputes Invoices will be disapproved for funding where your customer has notified us of a dispute. You can view any disputes by viewing the client daily report on the client manager. Invoices will be approved for funding again once the dispute is resolved. Advance notice of disapprovals for funding Advance notice of any disapproval due to ageing can be viewed by logging into your online Client Access. Notice of disapprovals Notice of any disapproval and re- approvals can be viewed in the Client Access. Re approvals Invoices may be re approved for funding. You can view this invoices on the client daily report. 9
Funding Automatic or By request draw downs At the commencement of your facility, your account will be set up either as by request or automatic draw down. By request means you will need to manually request for funds from us via Client Access. The automatic funding option means all available funds over $1,000 will be automatically swept into your nominated bank account on the day they are made available. Checking your availability and drawing down available funds To draw down available funds, log in to the Client Access. Click on the availability and click availability refresh. This will draw down the most current available information from our system. You will be notified your availability when the screen when the screen is refreshed. Once refresh is successful, select prepayment option, enter the amount you would like to request, then submit your request. 10
Credit control and collection As part of our service, we provide the following services: Collection For notified cases, your credit/operation officer will contact your debtors to collect payments on your behalf. Reminder will be sent on overdue account. Legal matters Some overdue or delinquent accounts may need to be served with legal notices to recover payment. We can send letter of demand and other legal notices to recover payment. Customer disputes We will also note any disputes raised by our customers and provide notices in our system which you can view on line. A dispute notification is available daily in the view report menu of the Client Access. 11
Statements of account Customer statement of account Monthly customer statements of accounts are typically sent to your customers by the second day of each month. This statement will outline all outstanding balances owed on your account and will provide all the necessary contact and invoice information. 12
Client Access Client Access is our secured, easy to use on line system which provides on line real time access to your account. You can view it via your computer, laptop, ipad, or iphone or other Andriod or Window 8 devices on line real time anywhere in the world. In Client Access, you will be able to access a wide range of information about your account including but not limited to the followings: Availability of funds Latest payments received from your customers Your top 10 customers balance Ageing of outstanding customer accounts Management Reports Advance notice of disapproval Notice of disapprovals and disapprovals Customer Disputes Detailed and summary aged trail balance ( ATBs) Client statement and fee charge by us Accessing your client access On commencement of your facility, you will be issued log in details of your Client Access. If you need to change or rest these details, please contact our operation manager. To access our client access simply visit: To ensure that you are fully aware of the movements in your account and your availability, we recommend you access your account daily. 13
Reports The table below outlines the most common reports you can access via the Client Access. Other reports are available on request via the Client Access. Report Frequency Comments Payment advice On transfer of payments to your account This report shows the details of payments made by us to your nominated bank account Aged trail balance Daily This report shows the open item debtors ledger on either detailed or summary view Customer receipts Daily This report lists your customer cash MTD receipts month to date Client daily report Daily This report includes the following information: Daily cash list ( including cash allocations) Daily adjustment report. This shows any movements of cash between accounts and any debit or credit journals which have been processed. Client Daily summary. This shows any changes to your ledger and current account Items disapproved for funding. This provides a list of any invoices which have been disapproved for funding that day Items reapproved for funding. This provides a list of any invoices which have been re approved for funding that day. Advance notice of disapprovals Monthly ( last day of each month) This report will inform you of any invoices funded on which will be disapproved unless payment is received from your customer by the end of the current month Tax invoices Monthly This details the service charges that have been applied to your account during the month Discount Invoice Monthly This report summarizes the discount charges that have been applied to your account during the month and 14
indicates how the discount was calculated. Client Statement Monthly This report shows all charges applied to your current account and movement in your sales ledger during the month. There are three statements: 1. Current Account 2. Sales ledger control 3. Client Balance Account Disbursement invoice Monthly This reports details all disbursement charges applied to your account for additional charges 15
Analyzing your account As part of our service, we provide you with information to help you to analyze your account over the past 12 months in numbers as well as in graphical form. In addition, you have a choice of using the line or bar graph. You can view the analysis on line real time anywhere in the world via your PC, laptop, iphone, ipad or Andriod or Window 8 devices. The followings are the information which you can analyze: 1. Invoices 2. Credit notes 3. Reassignment 4. Adjustment 5. Cash receipt 6. Ledger balance 7. Client Account 8. Average days outstanding (DSO) 9. No of accounts 10. No of payment The above reports/graph will help you to manage your business effectively. The report can be used to discuss with your clients or with your management staff such as : 1. Sales manager 2. Finance manager 3. Accounts manager 4. Senior management staff 5. Credit control manager 16
Accounting Two methods of Accounting for your facility are outlined below. 1. Debtor Control Account Method To ensure your accounting functions run as smoothly as possible and mirrors the services provided by us, it is recommended that two additional general ledger accounts be created. One should be called Bibby Control account and the other Bibby Expense account. The Bibby Control Account will be used to record the assignment of invoices to us and monies due from us. By updating the ledgers from the information that you are provided, you will be able to monitor all transactions that are passed through us and your accounts will reflect the true assignment of debt. Below are some suggestions for general entries onto your accounting system: Transaction Debit Credit Assignment of Invoices Bibby Control account Debtor account Advance from BFS account Bank Bibby Control account Fees charged by BFS Expense account Bibby Control account 2. Loan Account Method It is recommended that two additional general ledgers be created. One should be a liability account named BFS Current Account and the other an expense account named as Bibby Expense account Transaction Debit Credit Advance from BFS Bank BFS Current Account Fees charged by BFS Expense account BFS Current Account Receipt of customer payment by BFS BFS Current Account Debtors 17
Appendix 1 Details of Customers Customer Name Address Email Address Details of Customers Credit Terms Inv Currency Contact Number Contact Person Name 18
Appendix 2 Introductory letter (to be printed on seller s letterheand) Buyer Name Buyer Address Attn: xxx Date: Dear xxx We are pleased to advise you that we have entered into an Agreement (the Agreement) with Bibby Financial Services (Singapore) Pte Ltd (BFSS). Bibby Financial Services is the largest independent invoice finance specialist, which is wholly owned by Bibby Line Group with 200 years of trading history. Headquartered in UK, Bibby Financial Services operates in 47 locations spanning 15 countries throughout Europe, the Americas and Asia Pacific region. The Agreement with BFSS provides for the assignment of all our receivables and as part of that Agreement, all amounts due now and in the future, in respect of the invoices, must be paid only to Bibby Financial Services (Singapore) Pte Ltd. Payments by cheques are to be forwarded to the following address: Bibby Financial Services (Singapore) Pte Ltd 6 Shenton Way Tower 2 #18-08A Singapore 068809 If you wish to pay by bank transfer, please remit payment to the following bank account: Bank : Standard Chartered Bank Bank Code: 7144 Branch Code: 001 Account No: 010-256474-4 (for payment in SGD) Swift Address: SCBLSGSG Please fax your remittance advice to BFSS at 62250069 or email to them at sgops@bibbyfinancialservices.com. We look forward to be of better service to you and if you have any queries, please do not hesitate to contact BFSS at Tel: 69225030, and they will be happy to assist you. Yours faithfully Name Designation 19
cc. Bibby Financial Services (Singapore) Pte Ltd Appendix 3 Debt Schedule To : Bibby Financial Services (Singapore) Pte Ltd Pursuant to the Factoring Agreement, we hereby assign the attached list of invoices as transmitted via Client Access on. Attached are copies of the invoices / credit notes and supporting documents. Authorised Signature & Company Stamp 20
Appendix 3a Debt Schedule To : Bibby Financial Services (Singapore) Pte Ltd Pursuant to the Factoring Agreement, we hereby assign the following invoices as transmitted via Client Access on. Attached are copies of the invoices / credit notes and supporting documents. Debtor Number Invoice No Invoice Date Amount Total Authorised Signature & Company Stamp 21