In order for a factoring company to make an advance on an invoice, it must first be a real invoice. What constitutes a real invoice? The work has been finished completely, and fully accepted by the account debtor, the customer. Whether it is a service being provided or a product being sold, the deal has to be done. Partially done or billed for work to be done sometime in the future will not work with invoice factoring. Because accounts receivable financing relies on the factoring company having the ability to collect an invoice independent of their client, the work has to be complete. At the point an advance is made by the factor, the transaction becomes between the factoring company and the customer who has to pay the invoice.
To learn more about how to factor invoices click here