One element of invoice factoring that isn’t discussed as often as it should be is whether a factoring company can contact your customers. It can sometimes take businesses by surprise if and when they do. Businesses also sometimes find themselves only thinking about this when they’re in the process of finalising an invoice factoring agreement.

Your Needs or Those of Your Customers?

When you need invoice factoring, it’s invariably because you’re looking to increase the cash your business has available quickly. It’s normal to look at the monetary value of customers more when you’re pressed for cash. You may typically have individual understandings or unique financial approaches toward different customers, but this is particularly easy to forget when invoice factoring because you stop dealing with the customer relationship and you start dealing with their invoices as units that hold value.

Finding the right balance can be difficult, especially if it’s your first time entering into an invoice factoring agreement. It can be easy to see the value of a set of invoices and forget about what makes the customer who holds those invoices unique or what they rely on from you in terms of communication.

This isn’t the case with every business or with every customer, but it is worth thinking about. After the invoice factoring is concluded, you still want to have that person as a customer and you still want to manage communications with them.

Factoring Companies Will Not Harass Your Customers

This raises the question: how much contact can a factoring company have with your customers? The answer varies by company and by agreement. Factoring companies often understand that some businesses want to be more protective and involved with customer relationships than others. For this reason, there are different solutions offered.

Before we get to those solutions, don’t worry that your customers will be suddenly harassed by a strange company with which they’re unfamiliar. There may be some contact for basic verification, but it’s unlikely that a factoring company will make unneeded contact.

Keep in mind that factoring companies are viable businesses with reputations as well. They know that if they treat your customers well and you’re happy with them, you’re more likely to do business with them in the future. You’ve become their customer, and part of their managing a relationship with you is managing the relationships with your customers well.

Managing Customer Communication 

There are two approaches to keep in mind here: Notification Factoring and Non-Notification Factoring. Let’s dive into each:

Notification Factoring – In this case, a factoring company will communicate with your customers in order to confirm the invoice and its details, as well as make arrangements for payments. The factoring company will essentially take over communication with your customers in regards to the invoices that have been factored. Of course, you can still communicate with those customers as well. This isn’t a bad way of doing things and most companies that operate via Notification Factoring will do it professionally. Certain industries utilise factoring more and Notification Factoring is more common within these.

Non-Notification Factoring – Here, a factoring company will have either little or no communication with your customers. There are different ways of doing this that will be included in your invoice factoring agreement, so that the details are agreed to beforehand. Part of the agreement may be for you to contact your customers and provide them new account information. This account information would specify a bank account that the factoring company would list under the name of your business. This leaves you to handle communication, and the factoring company to handle the details from there. Another approach may simply be to contact customers as your billing department. This approach is more common – but not limited to – industries where factoring is utilised less often.

Notification Factoring Advantages

One of the reasons you may be using invoice factoring is because you’re already facing tight operating margins. If this is the case, you don’t necessarily have employee resources to spend notifying your customers of what is ultimately not a large change for them.

Letting the factoring company do this saves you the time and effort of contacting your customers. The more invoices and customers that are being factored, the more meaningful it becomes that the factoring company can do this work for you.

You may also prefer Notification Factoring because your customers or the companies that buy from you won’t think anything of it, and it’s simply easier to allow the factoring company to handle that one bit of extra work for you.

Non-Notification Advantages

One advantage of non-notification factoring is that businesses don’t necessarily want their customers to be aware that they’re in need of cash. Invoice factoring is not only done when a business is in a financial corner, but it is one of the more common reasons that invoice factoring is used.

Not wanting customers to be aware of a funding shortfall is understandable. After all, one element of success in many businesses is acting the part. Some customers may not find it appealing to have their invoices factored, thinking their only relationship is with your company and not with a third party. They may be wary of working with a business that provides information to a third party.

In these circumstances, non-notification factoring is a tremendously valuable way of keeping your business’s needs private. You have that right.

Both Notification and Non-Notification companies have privacy protections and will treat your customers’ privacy as their responsibility.


The approach that fits you best is one of many options you’ll have to decide when finding the best invoice factoring deal for your company. So keep in mind:

  1. It’s normal to forget customer communication when you’re worried about your own financial situation. Keep it in mind.
  2. Make sure you decide how you want your customers contacted early in the process.
  3. Opt for a company that will notify or not notify your customers based on your wishes.
  4. Notification companies save you some work but may reveal to your customers their invoices are being factored.
  5. Non-notification companies will endeavour to keep your invoice factoring private, and may ask you to communicate with your customers or offer to communicate as part of your company.