What your funder needs from your credit control
If your business uses invoice finance, your credit control is doing two jobs at once. Here is what your funder relies on you for, and why it decides how much cash the facility gives you.
On Business Training · 11 August 2026 · 6 min read
This article is for credit controllers at businesses that use invoice finance, and especially for those on confidential invoice discounting (CID), where your customers may not know a funder is involved and your team still does all the collecting.
On a facility like that, your sales ledger is the security for the money your business borrows. Every invoice you raise, chase and allocate changes how much the business can draw. That makes your credit control more important, not less, and it means your funder is relying on you for a few specific things.
1. Payments in the right account
Your facility agreement says where customers must pay. On CID that is usually a trust account in your company’s name that the funder controls. Payments that land anywhere else, in the old business account, by card, or in cash, must be passed to the funder’s account straight away and reported.
Most problems here are innocent: a customer with old bank details, a new customer who was never told. But a funder can’t tell an innocent mistake from a deliberate one unless you report it. Check the bank details on every new customer’s supplier form, and correct old ones as you find them.
2. Cash allocated quickly and correctly
When money arrives, your funder needs to know which invoices it paid. Unallocated cash makes the ledger look older than it is, which can reduce what you can draw, and it hides disputes and short payments that should be dealt with. Allocate from the remittance, not by guessing, and chase customers who pay without one.
3. Disputes and credit notes, reported promptly
When a customer disputes an invoice, the funder needs to know, because a disputed invoice may not be one it will lend against. When you raise a credit note, it must go through the ledger and the funder’s records at once.
Holding credit notes back, even with good intentions, is one of the things funders look for most closely. It makes the ledger look bigger than it is, and a funder who finds credit notes being held will treat it as a serious breach. Report disputes and credits as they happen.
4. Invoices that are real, complete and on time
Only raise an invoice once the goods have gone or the work has been done. Invoicing early, even by a few days to help cash flow, is pre-invoicing, and funders treat it seriously. Keep the proof: delivery notes signed by the customer, timesheets approved by the customer, job sheets. Your funder will ask to see them.
5. Honest, regular reporting
Your facility will ask for regular reports: usually the sales ledger, an aged debt report, and a reconciliation between your ledger and the funder’s records. Send them on time and make sure they agree with each other. If something doesn’t reconcile, say so and explain why, rather than leaving the funder to find it.
6. Help with verification and audits
Your funder will contact some of your customers to verify invoices, and will audit your ledger from time to time. On a confidential facility, verification is usually done discreetly, in your company’s name or as a routine check.
Help it go smoothly: give accurate contact details for your customers, have the paperwork ready, and answer questions quickly. Delays and reluctance at verification time are among the first things a funder notices.
Your aged debt report is your funder’s security. Keep it accurate and the facility works for you.
Keep your own notes
A short, dated note of every chase, dispute and promise is the best protection your team has. It lets anyone pick up an account, it shows your funder that an old invoice is being worked rather than forgotten, and it answers most audit questions before they are asked. If a customer later disputes a debt, your notes are the record of what was agreed and when.
Why it pays you back
Good credit control on a funded ledger is not only about keeping the funder happy. It directly affects your business’s cash:
- Younger debt means more funding. Old debt is usually excluded from what you can draw against.
- Fewer disputes means fewer surprises. Disputed invoices are often excluded until resolved.
- Clean reporting builds trust. Funders are more flexible with clients whose reporting they can rely on, whether on limits, concentrations or a temporary increase.
When a customer can’t pay
Sooner or later a customer will struggle. Tell your funder early. On most facilities the funder can help, and it needs to know before the debt becomes uncollectable. Never stop chasing an old debt quietly or write it off without telling the funder.
Credit Control for Clients is a short library written for exactly this job, at the businesses a financier funds. It covers How Your Funding Works and Why Collections Matter, Banking and Allocating Customer Payments, Reporting to Your Funder, and Disputes and Credit Notes: Telling Your Funder, and shares its collection call courses with Effective Credit Control.