Whole Ledger Factoring

Whole ledger factoring means a business uses invoice factoring to draw funds against their entire accounts receivable. Also referred to as whole turnover factoring, whole ledger factoring is most commonly used by small businesses who need a cash advance (provided by third-party factoring companies) to boost working capital. The difference between whole ledger factoring and spot factoring is that with spot factoring, companies are only factoring selected invoices – not their whole ledger.

For example, say ABC Grocery has a sales ledger of $50,000 per month and XYZ Grocery has a sales ledger of $500,000 per month. ABC Grocery may be more likely to use whole ledger factoring to get the full benefits out of a cash advance, whereas XYZ Grocery may use spot factoring rather than factoring their entire ledger, as they only need a portion of that $500,000 to cover short-term costs.

However, it should be noted that even businesses with a sales ledger of $500,000 per month or more still do use whole ledger factoring, as it depends on the company’s working capital needs.