Home Receivables financing: what is it? Types of receivables financing agreements Invoice picking factoring

Invoice picking factoring

In a context where payment terms are lengthening and cash flow requirements are becoming increasingly demanding, Fibus supports finance teams in implementing an invoice picking programme. Discover the benefits of this financing solution and the types of companies it is designed for.

What is invoice picking factoring?

Invoice picking is a receivables financing solution that allows companies to select, on an invoice-by-invoice basis, which receivables to assign to a factor and convert into immediate cash. Once an invoice is assigned (sold) to the factoring company, payment is typically received within 48 hours – eliminating long payment delays.

A factoring programme does not only cover the financing of assigned receivables. It can also include:

  • outsourcing of accounts receivable management
  • protection against non-payment risks through an included credit insurance policy
  • coverage against customer insolvency risk

Unlike balance assignment financing, invoice picking provides immediate liquidity by financing receivables individually, offering greater flexibility and control.

Discover other types of receivables financing.

Why implement invoice picking factoring?

Stronger and continuous cash flow

Invoice picking factoring allows you to convert your customer receivables into immediate cash as soon as invoices are issued. Once the invoice is assigned to the factor, you receive an advance on its value (typically between 85% and 95%), helping you stabilise cash flows and finance your working capital requirements (WCR).

Outsourced accounts receivable

Under an invoice picking financing agreement, your accounts receivable management can be delegated to the factor, which handles key processes such as cash collection, debt recovery, and invoice reconciliation.

The factor’s involvement helps preserve the quality and continuity of your commercial relationships. As a result, you save time and benefit from greater operational efficiency.

Protection against non-payment

Each factoring agreement is typically backed by a credit insurance policy. Most invoice picking programmes include this coverage as part of the solution. With integrated credit insurance, receivables financing secures your cash flows by guaranteeing collections – even in the event of customer default. Customers must meet acceptable creditworthiness criteria, as the factor relies on their financial strength when granting financing.

A scalable and sustainable solution

Among short-term financing options, invoice picking factoring is a stable solution designed for long-term use. It provides access to regular and predictable funding.

Because it is directly linked to your commercial activity, the financing naturally adapts to fluctuations in your revenue, without the need for constant renegotiation.

The option of undisclosed factoring

If your invoice picking programme is disclosed to your customers, you may choose to delegate collections, reminders, and reconciliation to the factor. Alternatively, you can retain control over your accounts receivable management under certain conditions – this corresponds to a notified non-managed factoring agreement.

However, your company may also be eligible for undisclosed factoring, subject to a satisfactory assessment of your receivables quality. In this structure, no assignment notice appears on invoices and your customers are not aware of the factor’s involvement.

Speak with our experts to assess your eligibility.

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Eligibility criteria

Invoice picking factoring is suitable for a wide range of companies, subject to certain key criteria:

  • Company type: B2B small and medium-sized enterprises (SMEs). Invoices must be issued to other businesses or public sector entities.
  • Industry: Some sectors are more easily financeable than others. A detailed analysis of your activity helps identify the most suitable factoring partners.
  • Turnover: Typically between €1 million and €20 million.
  • Common use cases:
    • High Days Sales Outstanding (DSO)
    • Supporting business growth
    • Managing periods of cash flow pressure
    • Expanding into export markets

Quality of receivables

Beyond your company’s profile, factors place strong emphasis on the quality of your receivables. Assigned invoices must be:

  • certain and non-disputed,
  • related to completed and validated services or deliveries.

Supporting documentation is usually required, such as signed delivery notes, invoices, and proof of service completion or acceptance.

Setting up invoice picking factoring with Fibus

Step 1

Scoping

We begin the project with an introduction to receivables financing and its key challenges, followed by a feasibility study to define your objectives and build a tailored financing strategy.

Step 2

Audit and diagnostic

Our experts analyse and audit your business and organisation, including your accounts receivable, order-to-cash process, credit management practices, accounting data, and IT environment. We then define a detailed request-for-proposal (RFP) specification to structure the tender process.

Step 3

Competitive tender process

Fibus runs a competitive tender process with receivables financing providers (bank subsidiaries and independent factors) to secure the most favourable pricing and operational conditions, including financing rates, fees, and credit insurance coverage.

Step 4

Structuring

We compare the different offers and provide our recommendations. You select your preferred partner, and we support you through credit committees to secure firm and final proposals.

Step 5

Contract signature and first financing

Upon signature, we establish a detailed timeline with key milestones leading up to the first funding date. After your initial invoices are assigned, financing is typically received within 48 hours.

Fibus provides ongoing post-implementation support to help you manage your factoring programme on a day-to-day basis and respond quickly whenever adjustments are needed.

The Fibus promise: accelerating and simplifying the setup of your invoice picking financing.

Discover Fibus’ advisory support and methodology, the leading receivables financing broker in France and Europe.

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Frequently asked questions about invoice picking factoring.

What is invoice picking factoring and how does it differ from other structures?

Invoice picking factoring allows you to selectively finance individual invoices, unlike balance assignment financing, which covers the entire accounts receivable portfolio.

You choose, invoice by invoice, which receivables to assign to the factor. The result is a fully flexible, tailor-made financing solution adapted to specific cash flow needs and to the profile of each customer.

How does the factor assess each invoice before purchasing it in invoice picking factoring?

Before any financing is granted, the factor performs an individual assessment of each receivable. This includes verifying:

  • the legal validity of the invoice (existence of a purchase order, proof of delivery or service completion, absence of disputes)
  • the debtor’s creditworthiness, based on recent financial data or an approved credit limit already in place
  • compliance with the credit limit assigned to that customer

Only invoices that meet these criteria are accepted and financed, ensuring risk protection for the factor and secure cash advances for the company.