Invoice discounting Ireland: confidential ledger funding

Confidential invoice discounting is a facility that advances cash against your sales ledger while your company keeps sending invoices and collecting payment in its own name. Customers pay into an account controlled by the provider but are not told about the arrangement. It suits established companies with their own credit control, and is often shortened to CID.

AIB Commercial Finance and Bank of Ireland Invoice Finance offer invoice discounting to established business customers, and Bibby Financial Services Ireland offers it too, including to PTSB customers referred to it. Independent providers also operate. Their minimum ledger sizes, advance rates and fees differ, so compare written quotes for your own ledger.

Banks set minimums based on your ledger rather than turnover alone. AIB Commercial Finance, for example, asks for an ongoing trade debtor ledger of at least €250,000 and an average funding requirement of at least €150,000. Bank of Ireland does not publish a minimum. Smaller companies, or those without credit control staff, are often better suited to factoring.

Pricing is a discount charge on funds drawn, set as a margin over the provider's base or prime rate and varying with facility size and risk, plus a service fee, typically a fixed annual amount charged monthly. Irish banks do not publish standard margins. Because you collect yourself, the service fee is usually lower than for factoring.

You report new invoices and cash received to the provider regularly, often daily or weekly through an online platform such as Bank of Ireland’s MIDAS. The provider audits your ledger periodically, checking that invoices are genuine, delivered and undisputed. Inaccurate reporting is a serious breach, so good accounting software and a disciplined finance team matter.

Bank of Ireland lists aged debts beyond a set limit, intercompany debts, disputed debts, contra balances where you also buy from the customer, and cash sales. Approved debts are usually invoices outstanding up to 90 days. Excluded debts reduce what you can draw, so keep the ledger clean and chase old invoices promptly.

Most discounting is with recourse, so the unpaid invoice drops out of your availability and your company covers the shortfall. In a serious default the provider can tell your customers and collect directly, which ends the confidentiality.

Yes. Availability rises and falls with the value of approved invoices on your ledger, up to the facility limit, and you can ask for a higher limit as sales grow. The reverse is also true: if sales fall or customers pay late, the amount you can draw falls, which can catch companies out in a downturn.

Choose discounting if your company has a reliable credit control function, a ledger large enough to meet bank minimums and a strong reason to keep the funding confidential. Choose factoring if you want the provider to collect for you. Our invoice factoring page and our guide to factoring vs invoice discounting set out the trade-offs.