Invoicing and invoice discounting

[Chris jones124]

I have recently started working for a company and I have concerns with the invoice system. The company appears to use invoice discounting from the bank based on the invoices that are put through each day but the majority of the invoices that are being put through every day are for work which is not needed or close to delivery dates. A lot of the stuff is not in production and also quiet a lot of it is classed as a no material job at the time of invoicing. We are talking about invoices that are 4,5 and sometimes 6 months in advance. The bank pay a set amount back into the company if the daily figure is met but this is only being achieved by put these invoices through.
My question is weather this practice is ok or is it frauding the bank who are realising funds based on the invoices?

 

[Ian J]

It sounds like fraud to me as no invoice discounting company that I know of will fund invoices for work that hasn't been completed.

I'm surprised that they get away with invoicing six months in advance as I would have thought that the bank's auditors would have spotted that

 

[pentel]

Where one of our suppliers uses a factor the factor will quite often ring us to check that the goods have been received and that there are no issues. This is not all our suppliers that use a factor but it happens occasionally. The factors way of checking things are working as they should.

It sounds like the company you work for may fail this test.

 

[NicoJ]

I agree with Ian on this, I'm surprised this hasn't already been picked up unless it's a relatively new account.

The company is delaying it's problems. If it is not meeting the required invoicing amount then it needs to have a frank discussion with the discounting company.

When the discounter disovers this it will make the problem much worse.

 

[Ian J]

When the discounter disovers this it will make the problem much worse.

Probably by appointing an Administrator and calling in the personal guarantees of the directors.

Time to look for another job methinks

 

[SERC1204]

Where one of our suppliers uses a factor the factor will quite often ring us to check that the goods have been received and that there are no issues. This is not all our suppliers that use a factor but it happens occasionally. The factors way of checking things are working as they should.

It sounds like the company you work for may fail this test.

Auditing of invoice discounting tends to be less frequent than it is with factoring, it sounds like the company could be building a house of cards for itself. Are you privy to the exact terms and conditions?

 

[Chris jones124]

Thanks for your reply’s. No sorry I do not know the exact terms and conditions. I think I will start looking for a different job. What should the next step be if I thought it needed looking into further?

 

[Ian J]

What should the next step be if I thought it needed looking into further?

Find another job then a spot of whistleblowing perhaps