How Quickly Can I Get Paid?
Some factoring companies can deposit your advance in your bank account on the day you submit your invoice. It’s very quick! However, if this is your first time factoring, there are a few things that will impact your timeline:
This means that if this is your first time factoring, you might be able to receive your first advance in as little as a couple of days. However, you should clarify the timeline with your factoring company before you begin.
How the Invoice Factoring Calculator Works
Our Invoice Factoring Calculator simplifies the initial step in understanding the potential cost of factoring services. By inputting the total invoice amount and estimated payment timeframe, the calculator applies industry-standard rates to offer an initial fee estimate. It’s a quick and straightforward method to gauge the financial implications of choosing invoice factoring for your business needs.
Step 1: Enter the Total Value of the Invoices You’d Like to Factor
Invoice factoring is flexible, and you do not need to factor all your invoices. While some businesses do, you can also factor a single invoice or factor several. Consider the total value of all the invoices you might like to factor and enter the figure in the “Sum of Invoice Value $” field.
You can experiment with different figures to see how your fees change. Generally speaking, the more you factor, the more you save.
Step 2: Enter the Days Until Payment is Expected
In the “Invoice Payment Term” field, enter the total number of days until you expect to receive payment. Most businesses that leverage factoring send their invoices the day work is completed or goods are delivered. If this is the case for you, try using your standard payment terms. For instance, if you give “net 30” terms, meaning your clients have 30 days to pay their invoice, you’ll enter “30” in the field.
If you’re trying to calculate your total fees for invoices that were generated at different times and, therefore, have different due dates, calculate your average first and input that. Conversely, you can calculate each invoice independently, though the calculator will not take into account any volume discounts you may otherwise qualify for.
Step 3: Review Your Instant Factoring Fee Estimate
In the “Overview” section, you’ll see two fields: “Factoring Fee %” and “Total Factoring Fee.” The corresponding figures are dynamic and automatically adjust each time you change a value or days figure.
Understanding Factoring Fees
Factoring fees are essentially the cost a factoring company charges for providing you with advance payments on your outstanding invoices. These fees can vary significantly based on several factors, including:
Our calculator uses average rates to provide an estimated fee, giving you a baseline understanding of the potential costs involved. You can learn more about how factoring fees work in “Calculating the Cost of Factoring: A Detailed Guide.”
Limitations of the Factoring Calculator
While our Factoring Calculator is an excellent tool for getting an initial estimate, it’s important to note its limitations:
Beyond the Calculator: Requesting a Detailed Quote
For a comprehensive understanding of how invoice factoring can benefit your business and a precise calculation of factoring fees, requesting a detailed quote is essential. Your factoring company will consider all variables – from industry specifics to risk assessments and advance amounts – to provide you with a tailored factoring solution that meets your business’s unique needs. Request a detailed factoring quote now.