Factoring Solutions Blog News, views and gossip from the world of factoring, invoice discounting and trade finance

The pharmaceutical retail giant with 3,000 stores in the UK has horrified it’s suppliers by writing to them all to change their payment terms to 75 days from the end of the month in which the goods have been delivered. This means that they could be taking credit of over three months for anything delivered in the first half of the month.

To add insult to injury, not only are Alliance Boots asking their suppliers to bankroll them but they are now insisting on taking a 2.5% settlement discount for “prompt payment”

I have a sneaking suspicion that we will be receiving a few enquiries for factoring and invoice discounting from Alliance Boots customers as they will no longer be able to fund their sales without additional help.

Posted under Uncategorized, factoring, invoice discounting

Recently released figures by the factoring companies’ trade association show that the average credit days taken by factored customers has worsened for the fourth year running from 56 days in 2003 to 63.1 days in 2007

Whilst some may put this 13% worsening down to the economic climate it is interesting that invoice discounting clients record an overall average reduction in credit days taken over the last three years to it’s current level of 55.8 days.

To summarise it would seem that clients of factoring companies that do their own credit control managed a 13% improvement over the factors credit control departments but it’s a shame the association don’t split the overall funds invested into factoring and invoice discounting as it would be interesting to know how much extra interest the factoring companies were able to charge due to their own inefficiency.

Ian

Independent Factoring Brokers Association

Posted under factoring