Costs & Benefits of Factoring

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With Ulster factors you can have peace of mind, we realise the importance of customers to any business and treat them courteously. Many of our clients find that removing the awkward task of collecting accounts actually improves the relationship between the client and his customers. We provide regular reports keeping the client appraised of the position of each account.

Like all services factoring has a cost but it is probably a lot less expensive than
most people would expect. there are two elements to the factoring costs: firstly there is the
Factoring Charge which is agreed in advance for the administration of the sales ledger which ranges
from 0.25% to 2.5% based on the number and value of invoices factored and secondly there is a Discounting Charge which is similar to bank overdraft rate and is charged on the funds in use. If the current account is in credit we will pay an abatement to the client at a rate in excess of current bank deposit rates.

Usually the client will find that the Factoring Charges will be absorbed by the profits arising from new sales financed through the factoring facility or by using the funds released through factoring to obtain improved buying terms from suppliers. In addition there is a saving in postage, stationery and telephone costs and most importantly key management time.

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This page was created by A-Tec Business Systems. Last edited on Monday 09 November 1998