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Common Risks Associated With Discounting Invoices

Whether you are a small or medium-sized business or a startup, lack of cash flow management is a major bottleneck in the growth of the company. If you donu2019t have enough money to survive the invoicing period, what would you do?

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Common Risks Associated With Discounting Invoices

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  1. Common Risks Associated With Discounting Invoices Simple | Fast | Reliable

  2. Introduction Whether you are a small or medium-sized business or a startup, lack of cash flow management is a major bottleneck in the growth of the company. If you don’t have enough money to survive the invoicing period, what would you do? That is where discounting invoices come in. Invoice-based financing is acquiring money from investors by keeping uncollected invoices of your business.

  3. Two Ways In Which Invoice-based Financing Is Carried Out Invoice Factoring: Invoice Discounting: This is done through an invoice-factoring firm and this firm will collect the invoices on which you have acquired money. Invoice factoring may decrease your market value, as your customer will know that you are acquiring money on loan. This may make you seem as less reliable. But, it will definitely reduce the burden on small businesses. Invoice discounting is acquiring money from a bill discounting company such as KredX. You will have to send across each invoice to this firm for proof. A mutually agreed percentage will be decided, which will be dispatched to your company account directly after each invoice. You will be collecting the money dues on invoices.

  4. Common Risks Of Discounting Invoices: Personal Guarantee There is no collateral involved in discounting invoices, which means that the lender with ask for a personal guarantee. If your invoices get delayed or the client’s firm gets insolvent, there can be serious legal consequences. High Charges Discounting invoices may cost you too much if you don’t check the guidelines and agreement thoroughly or choose the right service provider. You can end up in a whirlwind of debt instead. Dispute With Client You can have a dispute with the client during the invoicing period and they may refuse to pay the dues. This will trap you in a situation where you would have already acquired the money from the lender but the client is denying you the fees.

  5. Find A Trustworthy Platform Most of the above challenges can be mitigated easily by selecting the right platform for discounting invoices like KredX. Simply analyse the agreement and choose a reliable lender to keep the cash flow of your business healthy.

  6. Thank You Info@kredx.com www.kredx.com +91 8892043534 Delhi Bangalore Mumbai Simple | Fast | Reliable Apeejay Business Centre,6th Floor, Arunachal Building, 19 Barakhamba Road, Connaught Place, New Delhi - 110001 Ground Floor, Tower A, Salarpuria Softzone, Wing 'a, Outer Ring Rd, Bellandur, Bangalore - 560103 Wework, 14th Floor, 247 Park, Vikhroli West, Mumbai, Maharashtra - 400079

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