Sales Process for Invoice and Trade Finance: This Is How It Works

 In Debtor Finance, Purchase Order Finance, Trade & Inventory Finance

Want to service your client the best way possible?

So do we.

Get the right information the first time round.

If you are looking for a Trade or Debtor Finance facility for your client, this video will save you time and effort.


  • What steps are involved in approving an application
  • Why we process enquiries the way we do
  • How we get deals settled in short time frames

If you would would like to know more, please call the office on 1300 652 158 to book in an appointment with a Product Specialist.

Video, Diagram and Transcript below.

Daniel:             Hi, I’m Daniel from AR Cash Flow, and today I’m here with Julia. She’s our Sales and Marketing Manager.

Julia:                Hi, guys.

Daniel:             We’re going to go through a couple of commonly asked questions by both introducers and clients.

Julia:                Yes, absolutely. As you know, Daniel, I take a lot of calls from clients and brokers, and there’s a few common questions that come up quite often. The first one is:  Why do you have to meet the client in person? Why can’t you just qualify over the phone?

Daniel:             Yeah, that really good question. You get asked this a lot. Look, the main reason we want to get straight in and meet the client face to face is because, in the whole time I’ve been doing this type of business — which is a few years now — there is no such thing as a straightforward deal. There’s no such thing as a straightforward client. Every client is different.

Julia:                Yep.

Daniel:             Really, from the start of the inquiry, we really want to make sure we understand all the issues and get them out on the table straight away. You can’t really do that over the phone, and we really want to make sure we invest that time in the client straight away, to make sure they get the result, or we can fix that problem that they have. And if we can’t, then we can shake hands and go away, and then we don’t have to waste the client’s time on it any further or our own time any further.

Julia:                Great. And I guess you’re going to have to meet them eventually anyway, for legal reasons. You’re not going to go into business with someone you’ve never met.

Daniel:             Yeah, exactly. From their point of view, they want to know who they’re dealing with, and so do we. We’re business people, just like they are.

Julia:                So, instead of it being a time wasting activity, it’s actually a time saving activity.

Daniel:             You couldn’t have put it a better way, because we’ve done this so many times, and if we get applications or whatever and do a whole lot of work before we meet the client and then meet the client and find out we can’t even work with them or they don’t like us, for whatever reason, it saves a lot of time.

Julia:                Yep, great. So the next big one is:  Why can’t you just give an indicative price over the phone or rates over the phone or rates straight-up?

Daniel:             Yeah. I guess what you’re asking is:  Do we have a rate card?

 Julia:                Yeah.

Daniel:             We don’t. The reason why is pricing is very subjective, and it’s based on many, many different factors. So the reality is, before we even get to talking about pricing, the most important thing is:  Can we solve the problem, or can we get the client the results that they want? If we can’t do that, then the pricing is irrelevant. But if we can do that, we can make the pricing work for the client. So we can really take pricing out of the equation from the start.

Julia:                Right. Okay. So, I guess, why won’t you look at paperwork ahead of a meeting? I guess it goes back to what you said in the first bit.

Daniel:             It kind of does. The numbers do paint a picture and they do show certain things to us, but we don’t have the resources to process 60 applications a week and then have to go and meet those clients. I could spend hours and hours going through the paperwork, but until we meet the client, it doesn’t mean anything. The numbers are meaningless.

Julia:                Okay. So how long after a client or a broker fills out the application form are they going to expect to see an offer on the table?

Daniel:             If we’ve got an application back from a client, generally we can put a proposal together within about 24 hours. We usually have a credit committee that meets and goes through all the numbers and all the background. So, yeah, usually it’s around 24 hours. It depends on our schedule and also the client’s schedule as well.

Julia:                And it depends on how quickly they get everything to us.

Daniel:             Yeah, most of the time we are slowed down by the client.

Julia:                The next big thing is the commitment fee. Why do you ask for a commitment fee, along with the application, before you even begin to start working on the proposal?

Daniel:             Well, I’ll qualify that. It is a commitment fee, but it is fully refundable. It’s really just a deposit, at this stage, because we really just want to make sure that that client, if we can get them the result that they want or need or solve the problem, once again, that they’re going to go ahead. It’s not really a silver bullet to make sure that’s going to happen, but it’s sort of like, well, we’re investing our time in going through and processing that application and doing all of the due diligence or most of the due diligence. We want to make sure that they’ve got some skin in the game as well.

Julia:                Yeah, make sure they’re serious.

Daniel:             Correct, yeah. But if we come up with a solution and they don’t like it or they don’t like the colour of the paper it’s written on, give them their money back.

 Julia:                Yeah, fully refundable. So after you’ve presented the proposal, the client’s happy, they’ve signed it. How long until they are set up and ready to draw down?

 Daniel:             That’s a really good question. It depends a lot on the type of client that we’re trying to finance. It depends on how many client or customers they’ve got. If they’ve got, say, 1000 customers and every invoice that they want to finance those customers is $50, it may or may not, depending on who their customers are, take longer than it would if they had one client or one customer that we were financing. So it depends on how strong their paperwork is, the evidence of the work that they’ve done. Usually, we won’t check everything. We’ll check a good cross-section of their daily ledger. If we’re doing trade finance, we do it all at the same time, but that can take a bit of time as well. We need to make sure the manufacturer is solid, the manufacturer is who they say they are, and to verify the orders. A safe bet is somewhere between 5 and 10 working days.

 Julia:                Okay, great.

 Daniel:             And that’s assuming the client hasn’t slowed us down and has given us all the information we need.

Julia:                Well, that’s my next question. What’s the main thing that holds this process up?

Daniel:             It’s usually getting information from the client.

Julia:                So the main thing is you need the client to be as honest as possible, give you all the information at hand.

Daniel:             Honesty is good, a good start. Yes, that helps. But, also, you need them to be able to give us information when we need it. Because trade finance is not a perfect science or even data finance, sometimes you’ll get information from the client and you’ll realise, “Hang on, we need more.” So you’ll come back and say, “Well, we’re getting a bit of a picture, but if we had this bit of information, that would help.” So we ask for as much information as we think we need at the start, but sometimes we may need more to get our credit across the line on the transaction. The thing to remember is we’re really just trying to help the client at the end of the day. I mean, obviously, it helps us to help the client, but we want to get the deal done. We’re not trying to slow the deal down. But, at the same time, we don’t want to put a whole lot of money out on a client that we can’t get back. That wouldn’t help either that client or any of our other clients for that matter.

 Julia:                Okay, great. That’s all I have for now, Daniel.

 Daniel:             Thanks very much for joining me today, Julia.

 Julia:                Thanks for having me.

Daniel:             If you’d like to learn more, go over to our Facebook page. That’s or . . .what are our other pages? LinkedIn?

Julia:                LinkedIn, we’re on LinkedIn. Check out our YouTube channel.

Daniel:             And if you want an appointment, call Julia on our 1300 number. Thanks everybody for watching.

Julia:                Thanks, guys.

Recommended Posts
Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

Not readable? Change text. captcha txt

Start typing and press Enter to search