invoice stigma

Invoice stigma
By Kiran Stacey
Published: January 27 2009 02:00 | Last updated: January 27 2009 02:00
"A receivables funding arrangement" - otherwise known as invoice financing - is hardly the kind of corporate speak to get the heart racing, writes Kiran Stacey . But when Premier Foods mentioned a similar scheme in a trading statement last year, its shares fell almost 20 per cent.

This type of financing means a company effectively sells its invoices to a third party - usually a bank - at a discountto generate immediate cash. Sometimes the company asks the bank to then collect the debts due from customers, in a practice known as factoring.