0845 643 4611
Working Capital Specialists


Want to more about why and what concerns Factoring & Invoice Discounting Companies? Learn about debt factorbility.

Advance Billing


An Invoice raised legitimately by a company in the normal course of business in advance of the provision of the service to which it pertains (also see Deposits and Pre-Invoicing).

Pro Forma Invoices are a form of Advance Billing, generally for goods rather than services, and generally for the purpose of obtaining payment up front. Some examples would be: Rent Storage, Hire Charges Maintenance Charges.


Whilst the Invoice may be in accord with the terms and conditions or the requirements of the Customer, and may, in fact get paid, at the date of invoicing, there is no debt. The debt arises as the service is performed (or once the goods have been delivered in the case of a Pro Forma) which may well extend over a long period. The notification of such an Invoice to a Factoring or Invoice Discounting Company would expose the Factor to prepaying (funding the invoice) against a future debt. The Factoring Companies view being; if their Client ceased trading before completing the service (or delivering the goods) the debt would not be collectable, or, if already paid, may be offset against other debts.


This type of invoicing system can be identified by the Factoring or Invoice Discounting Company through a review of the Orders, Contracts, and Invoices: the nature of the business will also predicate its likelihood. The Factoring Company would likely ask questions like, Does your business invoice in advance for any of your services? Or, Do you ever raise Pro Forma invoices?


Factoring or Invoice Discounting Companies class Invoices of this type should not be notified to them, or if found, should be reserved against. If the major part of the business is found to consist of Advance Billings then it is not suitable for Factoring or Invoice Discounting.

If your business has a high incidence of Advance Billing we may be able to help through other specialist financing options.