How to create a 'factor friendly' invoice to your customer

You've probably been in business for quite awhile, your current invoicing system is working smoothly, and feel that you are not in need of any education on how to properly invoice your customers. Factoring companies are very cautious and particular about the accounts receivables they purchase. It was not often that I had a client who invoiced exactly the way we needed, but an invoice that is "factor friendly" will ensure easy verification and quicker turn around for funding and payment by your customer to your factor.


 You've probably been in business for quite awhile, your current invoicing system is working smoothly, and feel that you are not in need of any education on how to properly invoice your customers. Factoring companies are very cautious and particular about the accounts receivables they purchase. It was not often that I had a client who invoiced exactly the way we needed, but an invoice that is "factor friendly" will ensure easy verification and quicker turn around for funding and payment by your customer to your factor.

The first page of your billing should be the Invoice. This sheet contains your company name and address, a complete billing address to your customer in the upper left hand corner, detailed charges with a total below, and any payment terms and important remit to information. Your business will increase its professionalism and impression on your factoring company ten fold with a sleek and neatly typed up invoice. Bills that are look sloppy or handwritten on poor quality paper speak volumes to your account executive about your organizational skills and attention details, although they may not communicate this to you, it is a red flag for any factor to be extra careful when verifying. There were several instances where I had to return bills to my clients to enforce a more neatly created invoice. I have attached a sample template that you are welcome to make use of for no charge.

The rest of the paper work is comprised of what is usually called the Back Up. The original purchase order signed by your customer shows your factor that the service or product was in fact requested and serves as a confirmation of the agreed rate. This should always be the original version of this document with exceptions given only in the case that the order is a blanket or ongoing PO. In those cases, copies will suffice but will almost always require verification with your customer.

Equally as important as the signed Purchase Order is an original signed Proof of Delivery. Depending on the factoring company, delivery trackers from an overnight courier may be allowed here as well. This document show that your accounts receivable invoice is billing for product delivered or services rendered. Any invoice that does not contain a signed proof of delivery will surely not be funded until has verified thoroughly.

There are many website available for invoice help that are of no cost at all, The Invoice Machine,
 Microsoft Office Templates, and  Office-Kit.

Finally, leave any questions or concerns you've encountered with invoicing or problems you've experienced with your factoring company funding your invoices, and I will personally address each every one in a new article.