Factoring Companies and late payments

Hi,

We have been charged refactoring costs and interest from our factoring company on all our o/s invoices

can we transfer this cost to the client as well as charging the the norm
late fees + interest

pls advise

The refactoring charges and interest on all your o/s invoices is part of your agreement with the factoring company - right ? This has nothing to do with your clients, its your cost not their's right ?

As for charging normal late fees and interest, if your invoices are factored, surely it is for the factoring company to decide to collect or not. They own the debt, not you - right ?

This may be a bit late now but here's my opinion for what it is worth. Whilst CharlieM is right about factoring charges being part of an agreement it is not as simple as the factoring company owning the debt. If the customer does not pay the factoring company , you, as the supplier, do not get any money from the factoring company. So it is in the best interest of your company to chase the money to satisfy the debt to the factoring company. The factoring company make charges for absolutely everything. I have just invoiced a company for both charges from the factoring company and the normal late payment costs. BUT, i did notify them beforehand that if they did not pay before xx then all costs by the factoring company would be passed on to them. They didn't pay and so this is exactly what i did. Before you ask, the invoice has just gone out with 7 days to pay but a notice also to say that the interest clock was still ticking until paid in full!

Unless this is in your terms and conditions, I think you would be wasting your time.

It is the factoring company who owns the debt, only they can charge late payments etc.

If this is an invoice which you have raised, will you be factoring this too ? would be interested to hear if the factoring company would accept this as a valid invoice.

If such a demand arrived on my desk, I would simply bin it, as you have no basis to raise such a demand, as you don't own the debt. Unless the factoring company gives you permission to collect and to keep any late payment charges obtained. Its their money not yours !

My view ! Right or wrong ?