Invoice finance for consulting firms

• Cash flow challenge: Consulting firms often face delayed payments from corporate clients while payroll and contractor costs remain fixed and time-sensitive.

• Perfect for: Management, IT, engineering and marketing consultancies that invoice other businesses on 30–90 day terms or milestone-based contracts.

Boost your cash flow Speak to an expert

Why consulting firms experience cash flow pressure

Consultancies typically operate differently from product-based businesses. Common challenges include:

• Long corporate payment cycles (30–90+ days)

• Milestone billing structures

• Large invoices tied to project completion

• High payroll costs for consultants and contractors
• Irregular project pipelines
• Upfront investment in new client acquisition

Even profitable firms can face temporary liquidity gaps. Invoice finance helps bridge this gap between delivery and payment.

How invoice finance works for consulting firms

1. Consultancy services are delivered and an invoice is raised.
   
   

2. The finance provider advances up to 90% of the invoice value.
   
   

3. The client pays the invoice under agreed terms.
   
   

4. The remaining balance is released to the consultancy.

Factoring vs invoice discounting for consultancies

Consulting firms often need to consider client relationship sensitivity.

Invoice factoring

• The provider may manage collections
• Can reduce administrative burden
• Clients may be aware of the facility

Invoice discounting

• Confidential arrangement
• Consultancy retains full control of client communication
• Often preferred by established professional services firms

Choosing the right structure depends on the firm’s size, internal systems and client expectations.

Boost your cash flow Speak to an expert

Benefits of invoice finance for consulting firms

• Improves cash flow without waiting for payment terms

• Supports payroll and contractor payments

• Scales alongside revenue growth

• Does not require equity dilution
• Can reduce reliance on overdrafts or fixed loans
• Provides predictable working capital for expansion

When invoice finance may not be suitable

• You invoice individuals rather than businesses

• Invoice volumes are very low or irregular
• Contracts prohibit assignment of receivables
• Revenue is highly unpredictable

In such cases, alternative working capital options may be worth exploring.

Invoice finance compared to other funding options

How Novuna Business Cash Flow can help

Novuna works with professional services firms across the UK to structure invoice finance solutions that align with project-based billing and corporate payment terms.

Get in touch with our experts today and we will find you a great fit for your solution.