Ask the Collective

Is it standard practice for invoice finance providers to charge factoring fees on credit notes, and should members be paying multiple fees on related invoices?

No — charging factoring fees on credit notes is not standard practice and members should push back on this. One member reported being charged 1.6% factoring fees on three separate items: the original invoice, a credit note cancelling it, and a replacement invoice for redelivered goods after a recall. This resulted in an effective fee of 5% — well above the typical single charge. When questioned in the community, the response was direct: this practice is not normal. Members should clarify with their invoice finance provider whether fees should only apply to invoices actually advancing funds, not to administrative credit notes. If your provider is charging multiple fees on related transactions, it may be worth negotiating the terms or exploring alternative providers.