Follow the cash through the facility
Follow each invoice from the first advance to the customer's payment. Establish how that payment clears the funded balance, which charges are deducted and when any remaining money reaches your operating account. The agreement determines that sequence; the invoice total alone does not show what cash is available.
Use the following as a reconciliation checklist for a proposal. Confirm each stage with the provider; an invoice balance, facility limit and current draw availability are different figures.
| Stage | What to reconcile |
|---|---|
| Before drawing | Reconcile the unpaid ledger and identify which invoices and customers the provider accepts. |
| Availability calculation | Identify exclusions, customer limits, the advance percentage, existing drawings and other adjustments. |
| Cash drawn | Record the amount reaching the operating account and any charges deducted or paid separately. |
| Customer payment | Confirm where the money is paid, how the funded balance is cleared and how charges are allocated. |
| Ongoing review or exit | Reconcile new invoices, collections, credit notes, revised availability and any final settlement obligations. |
Swipe or scroll the table sideways to see every column.
Check the invoice before applying an advance percentage
Start with what the invoice represents: who owes the money, what has been delivered and whether the customer has accepted the work. Identify progress claims, deposits, consumer debts and other balances that may need different treatment. An unpaid invoice is a starting record, not evidence that the whole amount can be funded.
Ask for the proposed eligibility schedule in writing. For each exclusion, identify the affected invoices, amount and reason. A creditworthy customer does not resolve an unaccepted delivery or a disputed invoice.
- Is the work completed and accepted, and what evidence confirms delivery or acceptance?
- Is ageing measured from invoice issue or payment due date? What happens at the cut-off?
- How are disputes, credit notes, returns, offsets, retentions and progress claims treated?
- Are overseas, related-party or consumer debts included, excluded or assessed separately?
- How are connected customer entities grouped, and what limits apply to a large debtor?
In Atlas’s portfolio simulator, the overdue test runs from the due date to the assessment date. An invoice exactly at your chosen limit stays included; one beyond it is excluded. A provider may use a different rule. Passing the simulator’s checks does not verify the invoice.
Worked ledger: $100,000 unpaid does not mean $80,000 available
This is the same illustrative ledger used in the funding-base guide. Customer A owes $30,000 and B owes $50,000. Customer C has a disputed $12,000 invoice; D has $8,000 beyond the selected overdue limit. The 40% customer cap and 80% advance are chosen scenario inputs, not advertised terms.
| Calculation | Amount |
|---|---|
| Unpaid invoice face value | $100,000 |
| Disputed amount excluded: Customer C | −$12,000 |
| Overdue amount excluded: Customer D | −$8,000 |
| Initial eligible pool | $80,000 |
| Per-customer cap: 40% × $80,000 | $32,000 |
| Customer A contribution: smaller of $30,000 and $32,000 | $30,000 |
| Customer B contribution: smaller of $50,000 and $32,000 | $32,000 |
| Funding base after the customer cap | $62,000 |
| Illustrative advance: 80% × $62,000 | $49,600 before fees and existing drawings |
Swipe or scroll the table sideways to see every column.
The cap is calculated once from the initial $80,000 eligible pool. It is not recalculated as amounts are removed. Customer B can therefore exceed 40% of the final $62,000 base. This explicit, non-iterative method explains the simulator; it does not reproduce every provider’s concentration policy.
The $18,000 reduction for Customer B is separate from the $20,000 excluded for age and dispute. Keep those reasons visible so you can discuss the actual ledger rather than applying a percentage to the headline total.
Separate the reserve from cash you can draw
Do not call the whole $50,400 difference between the $100,000 ledger and the $49,600 advance a reserve waiting for release. It comprises $20,000 of excluded invoices, an $18,000 concentration reduction and $12,400 not advanced against the capped base. These amounts have different reasons for being outside the modelled advance.
A facility’s reserve or retained balance has its own release conditions. Ask which receipts, reconciliations and deductions determine release. The simulator’s $12,400 unadvanced portion does not promise a payment on a particular date.
The displayed advance also omits prior drawings, fees, offsets and any additional facility constraints. Obtain the provider’s current availability statement before deciding what can actually move into your bank account. Do not enter the same advance as both existing cash and a new forecast receipt.
Price the fee basis and the time outstanding
Build a separate line for each charge in the proposal. Record the amount or percentage, the balance it applies to, the period charged and the payment date. Funding interest, draw fees and administration costs can use different bases, so a single headline percentage is not enough to compare the cash cost.
| Cost question | What to record |
|---|---|
| Funding interest or discount charge | Which balance is charged, the rate convention, day-count basis and when charging starts and stops. |
| Service or administration fee | Whether it applies to invoice face value, funded value, turnover, each transaction or another agreed basis. |
| Minimum or ongoing commitment | Any minimum monthly charge, minimum usage, review charge or fee on unused availability; mark it inapplicable only after checking. |
| Entry, collection and exit costs | Which establishment, verification, collection, protection or termination charges apply and their payment dates. |
| Timing of deductions | Whether each cost reduces the advance, is billed later or is taken from customer collections. Count it once. |
Swipe or scroll the table sideways to see every column.
Atlas’s single-invoice cost calculator is deliberately simpler: its service percentage applies to invoice face value, and funding interest is simple annual interest on the gross advance for the entered days using 365 days per year. It deducts both calculated charges from the initial advance to show an illustrative net amount.
Its total-received figure assumes the invoice is paid in full. It does not price a complete revolving facility, all possible charges, changing drawn balances or a statutory comparison rate. Match the quoted fee basis and timing before using that result to compare proposals.
Agree who contacts the customer and who carries the risk
Decide how much control you need over customer contact, then check the service offered. Your team may retain collections or the arrangement may include collection support. Labels such as factoring, discounting, disclosed and confidential do not replace a written allocation of responsibility for reminders, disputes, payment accounts and customer notices.
Collection support does not by itself mean the provider absorbs non-payment. Ask which events create recourse to your business and what any non-recourse or debtor-protection promise actually covers, including exclusions and claim conditions.
- Who sends payment reminders, handles disputes and agrees customer extensions?
- Will customers be notified, and whose details appear on invoices or payment notices?
- Which account receives payments, and what is the process if a customer pays the old account?
- What happens if an invoice is credited, diluted, rejected or remains unpaid?
- Can funding be withdrawn or repayment demanded, and what notice or cure period applies?
- What security, guarantees and existing-lender consents are required under this proposal?
Test a late debtor before committing the advance
Build an ordinary collection forecast and a delayed-customer case. Keep wages, supplier payments and other committed costs on their due dates; moving a receipt later does not automatically move those costs. Recalculate any time-based funding charge using the actual agreement.
Then test whether the delayed invoice crosses an eligibility threshold or triggers a repayment obligation. A facility linked to receivables is not necessarily a larger source of cash when customers become slower. More outstanding invoices can coexist with less usable availability.
Separate the customer’s gross payment from the amount available to your operating account after the facility is settled. If you forecast the gross receipt, also include the related facility repayment and charges; if you forecast only the released net cash, do not subtract those amounts again. Use one consistent approach.
Compare the funding route with the underlying cash gap
| Business situation | Alternative to investigate |
|---|---|
| The work is not yet complete or the invoice is not accepted | Examine the project or purchase-order cash gap and agreed customer milestones; do not treat future sales as eligible invoices. |
| Receipts vary but the business needs a broader cash buffer | Compare working-capital or line-of-credit terms, including repayment, security and ongoing cost. |
| The purpose is a long-lived equipment purchase | Compare asset finance against the asset’s use and cash contribution rather than relying solely on a short receivables cycle. |
| The gap comes from disputed bills or recurring losses | Address the dispute, margin or operating problem alongside any funding discussion. Bringing cash forward does not remove the underlying loss. |
Swipe or scroll the table sideways to see every column.
Compare the same cash requirement and period. A facility with a smaller first draw may still have different recurring costs, administration and exit obligations. The lowest modelled charge is only one part of the decision.
Prepare a ledger the provider can reconcile
Use one assessment date and reconcile the unpaid ledger to your accounts before requesting an assessment. Keep supporting evidence beside the figures rather than relying on an invoice total alone. Ask the provider which reporting period, file format and secure delivery channel it requires.
Bring the wider business picture alongside the ledger: current income and expenses, existing debt, the cash-flow forecast and the reason for the facility. Then use the checklist below to connect those figures to the invoices, customer payment terms and proposed charges.
Atlas’s tools help you prepare and compare assumptions. When you are ready, you can discuss your funding needs by sending an enquiry to Atlas. The tools do not validate invoices, offer an approved facility, connect to accounting records or submit a lender application.
What to prepare
- A dated aged receivables ledger with invoice ID, customer reference, issue date, due date, original amount and remaining unpaid amount.
- Reconciliation of part-payments, credit notes, returns and adjustments, with disputed or retained amounts identified.
- Invoices, orders or contracts, payment terms, and delivery or service-acceptance evidence for the balances being discussed.
- Major-customer balances and recent payment patterns, including connected customer entities and any related-party or overseas debts.
- Current facility statements, existing drawings, receivables security and any lender conditions that may affect another facility.
- Recent financial statements, bank information and an ordinary and delayed-collection cash forecast for the period requested by the provider.
- A written fee and availability calculation, collection responsibilities, recourse conditions, notice periods and exit requirements.
Common questions
Can every unpaid invoice be financed?
No. The proposed facility determines which invoices and customers are accepted. Check the type of sale, evidence of completed work, age, disputes, retentions and other conditions. Reconcile accepted amounts before applying an advance percentage.
Why can one customer exceed 40% of the final funding base?
In Atlas’s worked scenario the dollar cap is 40% of the initial eligible pool, calculated once before concentration deductions. It is not an iterative limit on the final pool. The percentage is an illustrative input, not a lender policy.
Is the difference between the invoice total and the advance all a reserve?
No. It may include excluded invoices, concentration reductions and an unadvanced balance. Separate each component and ask which amounts can become available, under what conditions and after which deductions.
What changes if a customer pays late?
Test the later cash receipt, any additional time-based charge and whether the invoice remains eligible. Ask what happens to availability and whether your business must repay an advance. Do not assume the facility automatically absorbs the delay.
Will customers know, and who do they pay?
Confirm the disclosure and collection arrangement in writing. Identify the nominated account, who contacts customers and how misdirected payments are handled. A product label alone does not establish confidentiality or customer-service responsibilities.
Does factoring or debtor protection remove all non-payment risk?
Do not assume so. Ask which events are covered, which remain your responsibility and what exclusions or claim conditions apply. Collection support, credit protection and non-recourse terms answer different questions.
Does the invoice calculator show what I can draw today?
No. The single-invoice calculator uses stated fee and timing assumptions; the portfolio simulator applies limited eligibility and customer-cap rules. Neither checks the actual facility, existing drawings or all charges. Use the provider’s current availability statement for a draw decision.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.