For merchants that need a cash flow boost, or instant working capital to support growth initiatives, selective invoice finance can be an extremely effective, and flexible solution. 

In this article, we'll cover what selective invoice finance is, explore the benefits and provide details on the practical steps for implementing it at your business.

Related reading: What is Invoice Finance?

What is Selective Invoice Financing?

Selective invoice finance offers merchants a flexible way to manage cash flow by allowing them to choose which invoices to finance, rather than financing the entire sales ledger. 

This method is particularly beneficial for companies with fluctuating cash flows or those that have seasonal demand. Merchants can receive up to 90% of the invoice value almost immediately, which can be crucial for growth, paying suppliers, or covering day-to-day expenses.

How does Selective Invoice Financing work?

• The process of selective invoice finance begins with the selection of invoices. Typically, merchants will choose to finance invoices for large orders or from customers who typically take longer to pay.
  
  
• Once these invoices are selected, they are sold to an invoice financing company. The finance company then advances a significant percentage of the invoice value—often up to 90%—within 24 hours.
  
  
• The remaining balance, minus the invoice finance company's fee, is paid to the merchants once the customer settles the invoice.

Why Choose Selective Invoice Finance?

Immediate Cash Flow Improvement

The first & most obvious benefit to selective invoice finance is the immediate cash flow improvement merchants receive. With selective invoice finance, merchants can unlock significant amounts of cash tied up in unpaid invoices, advancing up to 90% of the invoice value on a pay-as-you-go basis. Merchants can receive this money within 24 hours, making it an incredibly flexible and efficient way to raise capital for short-term needs such as covering day-to-day expenses, paying suppliers, or investing in growth opportunities. 

Flexibility and Control

One of the key benefits of selective invoice finance is the control it offers merchants over their financial operations. Companies can choose specific invoices to finance, which is particularly beneficial for managing cash flow according to their unique business cycles and needs. Selective invoice financing does not require long-term contracts or commitments, allowing merchants to use the service as needed without additional obligations. 

The merchant also continues to retain control of the customer relationship with selective invoice financing - the finance provider does not chase up unpaid invoices, it is the responsibility of the merchant to do so. This means customers aren’t aware of the financing and they aren’t credit checked by a third party.

Cost-Effectiveness

Selective invoice finance can be more cost-effective compared to traditional factoring. Merchants only pay fees on the invoices they choose to finance, which can significantly reduce the overall cost of financing. This can be especially useful for seasonal businesses or those with fluctuating cash flow needs, as it allows them to manage their finances more efficiently without the burden of unnecessary fees. 

How to Implement Selective Invoice Finance

Invoice financing through Kriya

At Kriya we make it incredibly easy to finance your invoices and unlock working capital immediately.

• Get up to 90% of your invoice funded within 24 hours
• No hidden fees or contracts - you only pay when you finance an invoice
• Flexible financing: Pick and choose the specific invoices you want to finance 
• Go beyond your business credit limit
• Maintain customer relationships: Discreet payment collection
• Global financing: We support over 45+ countries and the major global currencies
• Hassle free experience: easy to use digital interface
• Help in real-time: personal customer support
  
  

With Kriya you’ll pay-as-you-go with invoice financing – pick and choose which invoices to finance as and when you need to access the cash. It’s a super flexible option that’s great for one-off or seasonal needs.

An Alternative to Selective Invoice Finance: PayLater

Selective invoice financing offers clear benefits to businesses looking to unlock working capital, but PayLater can often be a more effective alternative for merchants seeking to enhance cash flow and manage payments.

• PayLater removes the problem at the source: Merchants are paid immediately, while buyers benefit from flexible payment terms.
• Enhances customer satisfaction by providing flexible payment terms at the point of purchase within a seamless purchase journey.
• Built for both online & offline sales channels.
• Removes the waiting time associated with traditional invoice settlement.
• Supports cash flow management and fosters stronger customer relationships, boosting loyalty and repeat business.

Learn more about B2B BNPL

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