 - The factoring company should provide the completion of the factoring documentation with providing an induction to its operational procedures including an explanation of reports provided and stationery used.
- The client provide the factoring company with details of all debts currently outstanding together with debtor names and addresses including contact details and telephone numbers. In its turn, the factoring company will post details to its debtors ledger and will in most cases provide an open-item listing of the initial take-on for the client to check for accuracy. The factoring company will send a statement of account to each debtor together with a letter from the client advising the debtor of the involvement of the factor.
- After the completion of two above the factoring company will make available to the client the agreed percentage advance against the sales ledger. It is at the choice of the client as to how much of this availability it takes.
- All future invoices will contain an assignment clause advising the debtor of the factoring arrangement giving instruction that fees should be made direct to the factoring company. A schedule of invoices and credit notes are required to be sent to the factoring company on a regular basis using the factor’s stationery to summaries the details and attaching copy invoices/credit notes to this schedule. This information can be sent through email.
- After having accepted the assignment of invoices the factoring company will make available the agreed percentage of funding adding this to the current funds available to the client.
- The factoring company will take responsibility for collecting payments from debtors as invoices full due for payment. They will send the reminder letters or will make telephone calls to overdue debtors. They will also send a statement to the debtor once a month. Many factors will agree a collection procedure to suit the requirements of the client.
- As payments are received by the factoring company from debtors the sum advanced to the client is reduced and the remainder of the percentage advance is made available to the client. Moreover, a cash report will be sent to the client including details of invoices paid.
- The factoring company will send regular statements to the client as a rule monthly registering details of invoices and credit notes factored, advances made, factoring charges and cash received from debtors.
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