How can I obtain liquidity for my business with an invoice assignment?

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By means of an invoice transfer, you can obtain liquidity for your business when you need it most. If you don't know what this practice consists of, what benefits it offers you and what the steps are to transfer an invoice, be sure to read this article.

What is an invoice assignment?
An invoice assignment or factoring is a process by which a company can transfer the power to collect an invoice to a third party, usually a financial institution. With this, the invoice assignee can proceed to collect the document directly from the debtor once the due date has expired.

For example, let's imagine that a company has issued you an invoice for $900,000 pesos with a due date of 60 days, which means that you will not be able to receive that money until that deadline is met. What happens then if you need to pay your suppliers or assume costs of your operations and you cannot wait 60 days?

In this case, it is best to transfer the invoice to a financial truemoney database that can provide you with financing equivalent to the nominal value of the document, with the condition of deducting a commission amount for the service. This way, you will be able to receive cash without having to wait 60 days. After the invoice expires, the company that issued it is the one that must make the payment to the financial institution.

What are the benefits of assigning your invoices?
The main benefits of using invoice assignment are:

Access to liquidity: allowing you to ensure the continuity of your operations.

Provide facilities to potential clients: they can accommodate more flexible terms, which can encourage them to maintain an extensive business relationship with your company.

Ease debt collection management: the company to which you assign the invoice will be responsible for managing the collection from the debtor, so you can get rid of this task and concentrate on strategies and actions to boost your business.

What are the requirements for assigning an invoice?
requirements for invoice transfer

For an accepted invoice to be assigned, it must meet the following requirements:

The invoice and its respective transferable copy must be issued.

A payment date must be stipulated, either upon receipt of the invoice, a period from receipt of the merchandise or generation of the service, or a fixed date. If not specified, a period of 30 days from receipt of the invoice will be taken.

The invoice must state that it is “assignable” in the body.

The receipt of the goods or service must be included, with details of the place and date of delivery of the goods or provision of the service. It must also include the RUT, address of the beneficiary buyer and his/her signature.

The invoice must not have been claimed.

Payment must be due and not overdue.