Our invoice factoring calculator can help businesses estimate the cost and benefits of using invoice factoring services. It helps in determining how much cash a company can receive by selling its accounts receivable to a factoring company and what fees or charges may be involved in the process.
Page written by AI. Reviewed internally on March 15, 2024.
Calculating invoice factoring involves a few steps:
Determine the total value of your outstanding invoices: Add up the amounts that your customers owe you for goods or services you’ve already delivered.
Decide on the factoring fee or discount rate: This is the percentage of the total invoice value that the factoring company will charge you for their services. For example, if the fee is 3%, then the factoring company will advance you 97% of the invoice value.
Calculate the cash advance: Multiply the total value of your outstanding invoices by (1 – factoring fee). This gives you the amount of cash the factoring company will advance you.
Understand any additional fees: Some factoring companies may charge additional fees, such as setup fees or processing fees. Make sure to account for these when calculating the overall cost of factoring.
Determine the net amount received: Subtract any additional fees from the cash advance to find out the net amount you’ll receive from the factoring company.
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
Your results
Cash advance
$0
Factoring fee
$0
Cash available after the invoices have been paid
$0
Total cash received by the end of the factoring process
$0
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