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The process is very straightforward. A business provides work, services, or products to their customers. When the customer is billed, the unpaid invoice is sent to the factoring company first. The factoring company advances the business, a percentage of the value of the invoice, generally 90%, that same day.

The invoice is then sent on to the customer, who processes and pays it in their regular terms. The customer then pays the factor. Once the invoice payment has processed, the remaining balance of the invoice, less a factoring fee, is remitted to the business.

In most cases, the process will entail the following sequence of events:

1. Client submits invoices

The client batches the stamped/labeled invoices with the necessary support documentation attached and submits them to BC Factoring via our browser-based software or mobile application.

2. BC Factoring receives and processes invoices

Upon receipt of your invoice submissions, we will verify your invoice that your customer has received and accepted delivery of the goods and/or services indicated on the Invoice, Bill of Lading, Proof of Delivery, etc.…

3. Disbursing Funds to You

Once we have processed the invoices and completed verification, we will wire an advance of generally 90% of the invoice(s) amount to your account.

4. We track your invoice performance, provide you reports and collect the payment for you

We track the aging of your invoices and place follow-up inquiry calls to your customer if an invoice becomes past due. If standard industry paying habits typically exceed invoiced terms, we will usually time our inquiry calls to reflect that fact.  It is standard policy to make an initial inquiry call at 45 days from the date of the invoice and subsequent calls or emails every 10 days thereafter.

5. Deposits and posting of payments

We will deposit any received payment immediately and complete posting of payments within one day.

6. Disbursement of your rebates

Under most factoring arrangements, clients accrue a reserve account balance as the we collect payments. After first deducting the factoring fees, we remit any excess balance back to the client in the form of "rebate”.  BC Factoring pays rebates as individual invoices are collected, subject to a processing lag. In most cases we make payments periodically, such as once each week after collecting sufficient amounts on individual invoice batches to recover their respective advances and fees.

Understanding Invoice Factoring Fees

Invoice factoring rates are based on the monthly volume of invoicing sold to a factoring company. As your monthly sales improve, and you factor a higher volume of invoices, the factoring fees will go down.

  • Advance Rate – Advance rates are based on a number of variables. These include the industry the client is working in, the average invoice amount, and the invoice terms.

  • Payment Terms – The payment terms on the invoice have an effect on the cost of factoring in that the longer the payment terms, the higher the factoring fees will be.

  • Factoring Fees – Factoring fees are the cost of factoring. Factoring fees are based on the volume of invoicing the client commits to factor each month, the credit and payment history of the client’s customers, and the length of time it takes the customer to pay the invoice.

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