Invoice Discounting For Service Industry

The service industry forms a critical component of the Indian economy, accounting for nearly 60% of the country’s GDP. Today, the service industry has emerged as one of the largest and fastest-growing sectors, consequently contributing to global output, attracting significant foreign investment flows, and generating employment. However, several factors like increased competition, tighter margins, longer and delayed payment cycle, payment defaults add on to the many challenges that businesses need to endure.

Nonetheless, on a daily basis, the service industry produces a considerable number of invoices, resulting in the need for quick access to working capital. An easy and efficient way to tackle pending invoices and concurrently generate working capital is through Invoice discounting. Invoice discounting for service industry can help fund companies by freeing up cash sitting in unpaid invoices. By getting access to the working capital, businesses can pay the labour costs, procure raw materials, settle outstanding bills, salaries, distributor charges on a timely basis. Additionally, the dependency on unpredictable and fluctuating factors makes it all the more necessary for businesses to have a seamless cash flow system.

Service Industry

How Invoice Discounting Helps Service Companies:

Invoice discounting for the service industry can help in more than one way

Unlock tied up money by clearing unpaid invoices:

  • Get access to quick working capital within 24-72 hours*
  • Fulfil your cash flow requirements with our zero-collateral solution
  • Make optimal use of your unpaid invoices for overhead expenses

Optimum operations with invoice discounting:

  • Ease business efficiency with access to working capital at all times
  • Access to liquidity to cover various costs
  • Happier customers due to excellent services

Fuels business growth by getting access to liquidity:

  • Timely payments leading to more orders
  • Growth in business due to more sales
  • Larger deliverables


How Does Invoice Discounting Work?

  • Business raises an invoice to the customer that is payable within 30 - 90 days
  • Post KYC and successful onboarding, business uploads unpaid invoices on the KredX platform to receive working capital
  • Funds get credited into business's account within 24 - 72 hours*

Why KredX?

  • Quick access to liquidity: Get quick access to working capital with KredX’s invoice discounting marketplace that enables businesses to receive funds within 24-72 hours*
  • Collateral-Free Required: Get working capital with zero collateral
  • Discount rates ~ 1.2-2%**: List unpaid invoices at market discount rates
  • Easy Digital Process: Enjoy a seamless and secure digital process with the technology-embedded KredX platform
  • Real-time Status Update: Track the status of listed invoices and get updates on them

Eligibility Criteria:

  • The service industry business should be at least 10 months old
  • The service industry business should cater to at least 2 large-scale corporates
  • Should have a CIBIL score of 680 and above
  • The service industry business should have a minimum turnover of Rs 25 Lacs


Documentation:

The following documents are required for the onboarding stage

Pre Sanction Stage:

  • KYC of directors
  • CIBIL record of directors
  • Proof of address and PAN Card of company
  • Bank statement of the last 12 months
  • Books of account/audited financials
  • Sales data for the last 1 year
  • Loan Declaration

Post Sanction Stage:

  • Board Resolution
  • Post dated cheque
  • Tri-partite undertaking involving KredX
  • Memorandum of Association and Article of Association
  • Personal guarantee letter
  • Articles of association

FAQs On Logistics Invoice Discounting:

Any service industry business that supplies goods/services to large blue-chip companies can avail the invoice discounting services offered by KredX. The company should be willing to share their financial information and other related documents for the verification process.