what is bill discounting

Bill discounting is a financial activity in which a company sells its outstanding invoices to a financier, such as a bank or another financial institution, that agrees to pay the company for them at a discount. The point of doing this is to gain access to short-term financial assistance. Bill discounting is also known as invoice discounting. The process of bill discounting involves selling unpaid invoices to a financier who will then pursue payment. The seller recovers a number of the invoices value upfront, and the financier collects the full amount from the buyer when the invoice is due. The benefits of bill discounting include collateral-free finance, quick processing, availed for short-term financial aid, digital process, hassle-free documentation process, simple eligibility criteria, and no impact on the business balance sheet. Bill discounting is a trading activity that allows sellers to get quick payment for their work and meet their operating expenses without depending on any external agency to provide the funds.