Frequently Asked Questions

faqs

What is invoice finance?

 

Invoice financing is a process which involves releasing cash which is tied up in as yet unpaid invoices. The invoice finance company advances the cash (usually 80-90% of the invoice value) as soon as the invoice is raised.

This form of financing is quick and easy to access. It is incredibly flexible and can offer a great alternative to business loans or using overdraft facilities.

Invoice financing can be the perfect solution to peaks and troughs in cash flow caused by late paying clients.

What are the benefits of asset based lending?

 

Asset based lending can be a quick and convenient way to access funds. With asset based lending we will free up cash to your business which would otherwise be tied up in property, equipment or other assets owned by the business.

Interest rates are typically lower than the rates on unsecured loans and repayment can be arranged on a flexible basis. It can be a really straightforward way to secure funds when a cash injection into the business is needed.

What is the difference between invoice financing and invoice discounting?

 

With both approaches cash is advanced to the business against invoices which have been raised for products or services. The difference is that with invoice financing Zodeq takes care of credit control, chasing and collecting payment on behalf of the client. With invoice discounting the business continues to manage its own credit control.

Some organisations prefer invoice discounting because they remain in control of their credit control and their clients will be unaware that they are accessing an invoice discount service.

What type of business uses invoice finance or invoice discounting?

 

Invoice financing and invoice discounting can be used by any type of business. Our clients come from a wide range of industries, (recruitment, engineering & manufacturing, construction, warehousing & distribution, haulage and printing).

Invoice financing, or factoring as it is often referred to, has grown in popularity, many business owners and managers find it offers a practical method for managing cash flow. It is a flexible approach to finance and it is often quicker and easier to access funds this way than through a traditional business loan or overdraft.

Typically, businesses use invoice financing or discounting for its flexibility and to ensure cash flow comes into the business as it is required.

Will customers know I use invoice financing services?

 

If you choose our invoice financing then your customers will know that you are using our services. This is because they will make the payment to Zodeq and if their payment is late we will fulfil the role of credit control. You can rest assured that this will be carried out in a professional manner.

Sometimes clients are concerned about their customers knowing they are accessing a finance solution. However, factoring and invoice financing are now commonplace in business.

How quickly will I receive my funds?

 

The process is quick and straightforward. As soon as the invoice is raised we will start processing your advance. Whatever your invoice terms this can make a huge difference to cashflow within a business.

Are all businesses eligible for invoice discounting?

 

The simple answer to this question is no, as with any form of finance we do have certain criteria which needs to be met. However, we are flexible in our approach and we will assess each client individually. We work with businesses from a wide range of industries and can help brand new start-up businesses as well as more established businesses.

Invoice financing sounds great but what costs are involved?

 

  • Service fee
  • Discount charge
  • One time set up fee

Can invoice finance be used to fund weekly payroll for candidates?

 

Yes. We can provide up to 100% funding for your sales invoices to cover your weekly payroll. For many recruitment businesses this is the perfect solution to plugging the gap between when a worker needs to be paid and when a recruiter can expect payment from the client. Using invoice finance means funds are in place to ensure workers are paid on time every week regardless of late payments from clients.

Why is invoice finance important to recruitment companies?

 

Invoice finance is particularly important for recruitment companies because of the gap between workers needing to be paid and the agency actually receiving their payment from the client. The nature of offering recruitment services, particularly temporary recruitment, is that agencies need to have the cash in place in order to pay their workers well in advance of receiving payment from the client. Even for large established agencies this can pose problems, even a relatively cash rich recruitment business may experience cash flow problems during busy periods.

It also offers a valuable solution for recruiters to the time-consuming problem of chasing payments.

What if I only want to finance temporary placements?

 

That is absolutely fine. We work with recruitment businesses specialising in either permanent or temporary recruitment as well as those offering both. We can finance all your invoices or selected invoices depending on the requirements of your business. We aim to offer flexible solutions to meet the needs of a specific business at that point in time, as a business grows and evolves our services can change too.

What happens if a candidate leaves their role before their probation period ends?

 

This will depend on the terms and conditions you have in place with your client. Each situation is different but where a candidate leaves before completing their probation we will work with you to agree the best solution and an appropriate rebate where applicable.

How do I receive my weekly margin?

 

Clients using our agency or principal service will receive their margin weekly on a Thursday. Once we have processed timesheets, allocated any deductions and retained our fee then we compile a report detailing all workers paid, any deductions and our fee etc. This is sent out weekly every Thursday along with the payment of the accompanying margin.

Why do I need recruitment back office support?

 

Depending on what stage your business is at and your current staffing levels, back office support can make all the difference to enabling a business to progress and flourish. Back office support is often seen by new start-ups as a service they will need for the short term. In reality, many opt to continue to outsource some or all of their back office even once they are well established as it frees up time and can be an effective and efficient way to run a recruitment agency. We can also help agencies who find themselves needing back office support because they have grown and the volume of administrative work has increased.

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