Selective Invoice Finance Batch Cost Model

A free spreadsheet for pricing a batch of invoices on selective (spot) invoice finance. List the invoices you want to put forward, mark which ones the funder accepts, rejects or has not decided on, and enter the terms from your quote. It works out the cash you get now, the effective advance on the whole batch, how much the rejections and any capped advances cost you in cash, every fee line, the total cost and the cost per £100 advanced. On the worked example below, a quote with an 85% advance turns into 53.4% of the batch in cash. No email needed to download.

Why a batch pays out less than the quote suggests

A selective quote gives you an advance rate and a fee per invoice. Both apply to invoices the funder accepts, at the advance the funder agrees for each one. Put forward ten invoices and the cash that lands depends on how many survive the funder's checks, which is why a single-invoice calculator can overstate what a batch will raise. Three things take the cash down:

• Rejections. The funder declines some invoices outright: a customer it will not take credit risk on, work the customer has not yet signed off, an invoice in dispute, or one that is already too old. Our aged debtors template flags the age and dispute problems before you submit.
• Capped advances. The funder accepts an invoice but advances less than the headline rate on it, often because it already holds a lot of that customer's invoices. The debtor concentration checker shows when a single customer is likely to hit that kind of limit.
• Invoices still waiting on a decision. A new customer may need a credit check before the funder commits. The model lets you count those at a rejection rate you choose, so you can plan with a cautious figure rather than assume they all go through.

Fees then work on what is funded. The time fee in particular depends on how long each customer takes to pay and on whether the quote charges per started period, so the same batch can cost noticeably more if a few customers pay late.

Try it in your browser

The same model runs below, starting with the worked example. Overwrite any figure and the results update. Four blank rows are there for extra invoices; the download has room for 100. Nothing you type leaves your browser.

Worked example

A business wants £60,000 and puts forward 8 invoices to five customers, £96,000 in all. The funder accepts 4, rejects 2, and is still running a credit check on the 2 invoices to a new customer. It also caps the advance on one of Customer A's invoices at 70%. The customers, invoices and terms are invented to show how the model behaves, and they are the example rows in the download.

### Worked example: terms from the quote

| Term | Example figure |
| --- | --- |
| Advance rate | 85% |
| Initial fee | 1% of invoice value, once per funded invoice |
| Time fee | 0.9% per 30 days, on invoice value, per started period |
| Fee per funded invoice | £25 |
| Fee per invoice submitted | £0 |
| One-off fees for the batch | £150 |
| Assumed rejection rate for undecided invoices | 25% (a planning assumption) |
| Cash needed from the batch | £60,000 |

Illustrative terms chosen to show how the model behaves. Not any provider's pricing.

### Worked example: 8 invoices put forward, £96,000 face value

| Customer | Invoice | Value | Days to pay | Decision | Advance | Cash advanced | Cost | Note |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Customer A | INV-2041 | £18,000 | 45 | Accepted | 85% | £15,300 | £529 |  |
| Customer A | INV-2042 | £12,500 | 45 | Accepted | 70% (capped) | £8,750 | £375 | Advance capped: funder's limit on this customer reached |
| Customer B | INV-2043 | £9,600 | 30 | Accepted | 85% | £8,160 | £207 |  |
| Customer C | INV-2044 | £22,000 | 60 | Rejected | 85% | £0 | £0 | Customer failed the funder's credit check |
| Customer D | INV-2045 | £6,400 | 60 | Rejected | 85% | £0 | £0 | Work not yet signed off by the customer |
| Customer E | INV-2046 | £14,800 | 60 | Unknown | 85% | £9,435 | £330 | New customer, credit check pending |
| Customer B | INV-2047 | £7,200 | 30 | Accepted | 85% | £6,120 | £162 |  |
| Customer E | INV-2048 | £5,500 | 60 | Unknown | 85% | £3,506 | £134 | New customer, credit check pending |

Invented invoices. Undecided invoices are counted at the assumed 25% rejection rate, so they show 75% of their full cash and cost.

### Worked example results: £51,271 cash advanced against £96,000 submitted

| Result | Value |
| --- | --- |
| Face value submitted | £96,000 |
| Accepted / rejected / awaiting a decision | £47,300 / £28,400 / £20,300 |
| Face value funded (accepted plus expected share of undecided) | £62,525 |
| Cash at the headline advance on everything submitted | £81,600 |
| Cash lost to per-invoice advance caps | £1,875 |
| Cash lost to rejections (the rejection haircut) | £28,454 |
| Cash advanced now | £51,271 |
| Effective advance on the whole batch | 53.4% |
| Initial fees | £625 |
| Time fees | £974 |
| Fixed fees | £138 |
| One-off batch fees | £150 |
| Total cost of the batch | £1,887 |
| Cost as % of face value funded | 3.02% |
| Cost per £100 advanced | £3.68 |
| Simple annual cost of the cash (not an APR) | 30.1% |
| Balances released when customers pay | £9,517 |
| Shortfall against cash needed | £8,729 |

Source: Market Invoice selective batch cost model

Computed by the model on this page from the invoices and terms above. Figures rounded to the nearest pound.

What the example shows

• The headline advance is not the batch advance. 85% of £96,000 would be £81,600. The two rejections and the discount on the undecided invoices take £28,454 off that, and the capped advance another £1,875, leaving £51,271: an effective advance of 53.4%.
• The shortfall is the number that matters. The business needed £60,000 and gets £51,271, £8,729 short. If the new customer's invoices are rejected too, cash falls to £38,330, a £21,670 gap. That is worth knowing before a supplier or payroll date, not after.
• Cost per £100 advanced is higher than the fee rate suggests. Fees total £1,887, which is 3.02% of the face value funded but £3.68 for every £100 of cash, because fees are charged on the full invoice value while only 85% or less is advanced.
• Rounding and late payment move the cost. Charging per started period rather than pro rata adds £137 in time fees on this batch. If every customer paid 15 days later than expected, total cost would rise from £1,887 to £2,175.

How each line is calculated

Every figure in the workbook is a visible formula on the Invoices and Results sheets, so you can check it.

• Acceptance weight = 1 if accepted, 0 if rejected, and 1 minus your assumed rejection rate if the funder has not decided.
• Days outstanding = days until the customer is expected to pay, plus any late payment buffer.
• Face value funded = invoice value x acceptance weight.
• Cash advanced = face value funded x advance rate (the invoice's own capped rate where there is one).
• Fee periods = days outstanding / period length, rounded up to whole periods if the quote charges per started period.
• Initial fee = face value funded x initial fee %.
• Time fee = face value funded (or cash advanced, if that is how the quote works) x time fee % x fee periods.
• Fixed fees = fee per funded invoice x acceptance weight, plus any fee per invoice submitted, which is charged even on a rejected invoice.
• Effective advance = total cash advanced / face value of everything submitted.
• Rejection haircut = cash if every invoice were accepted at its own advance rate, minus cash advanced.
• Simple annual cost = total cost / (sum of cash advanced x days outstanding / 365). It ignores compounding and the timing of fees, so treat it as a rough comparison with other borrowing, not an APR. For a closer figure on a single invoice, use the APR equivalent calculator.

What it does not cover

The model assumes one quote with one set of terms for the whole batch. Selective quotes are not all built the same way: a quote may charge a single flat fee, a fee per week or per day, a different price for each customer, or take its fees out of the advance rather than the balance.

Set the Terms sheet to match your quote's wording, and if one customer is priced differently, run it as a separate batch. It does not add VAT to fees, and it does not model what happens if a customer never pays, which depends on whether your facility is with or without recourse.

If you are still choosing a facility, the fee comparison model lines up three quotes over a year of invoicing, and the selective vs whole-book calculator shows whether funding your whole ledger would work out cheaper. Our guides to selective invoice finance and single invoice finance explain how the product works, and the UK Invoice Finance Rate Index shows the rates providers publish, if you want a sense check on a quote.