Invoice Factoring Cost Calculator

How it is calculated

Three figures come from one invoice: fee = invoice × fee% ÷ 100, advance = invoice × advance% ÷ 100 and net received = invoice − fee. Invoice is the face value in dollars, fee% is the factor's charge as a percent of that face value, and advance% is the share paid to you up front. All three fields are required: the invoice must not be negative, and both percentages must be between 0 and 100, otherwise no result appears. The fee is one flat percent of the invoice, so it does not grow with the days the invoice stays unpaid; if your factor charges per 30 days, convert that to the total percent for the expected collection time first. Net received is the total you end up with after the customer pays, so the amount released on collection is net received minus the advance. The tool does not check the advance against the fee.

Common mistakes

• Typing 0.03 instead of 3 for the fee. Both rate fields are percents, so a 3% fee is entered as 3.
• Treating the factor's monthly or per-30-day fee as the total fee. The tool applies the percent once, so a 1.5% fee per 30 days on an invoice paid after 60 days should be entered as 3.
• Mixing up the advance and the amount you finally receive. The advance is only the first payment (85% here); the net figure is what you hold after the fee once the invoice is collected.
• Entering a fee or advance above 100. Those show no result, and so does leaving the advance field empty.
• Comparing the 3% fee with a loan's annual rate. The fee covers a short collection period, so the same cost over 60 days is far higher as a yearly rate.