While Invoice Financing is a form of Invoice Discount, Invoice Factoring is a form of Invoice Financing. Confusing? Invoice Factoring helps take over the collection from your clients by purchasing your accounts receivable. The lender will pay you a percentage ranging from 85% to 90% of the total quoted amount on the invoice. Then, take over you in collection of the full amount. Upon the full collection, they will reimburse the difference with an agreement of a small fee for the service. Your clients will then make the necessary payment during the collection . Invoice Factoring is suitable for business with outstanding accounts receivable of 2 to 3 months and for those who prefer an external financial service provider to do it for them.