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What are Guaranteed Invoices, and how do they work?

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Part 1: About Guaranteed Invoices

Guaranteed invoices are a way for businesses to get paid faster and more reliably. They work by incentivizing buyers to pay their invoices early, which benefits sellers by improving their cash flow.

There are two types of guaranteed invoices: Type 1 and Type 2. Here's what you need to know about each type:

Type 1 Guaranteed Invoices

  • How is it created? 
    • A seller offers a discount to a buyer, who takes action to fund the invoice before the discount expires and receives the discount.
  • Do discounts apply? 
    • Yes, a discount is offered to the buyer.
  • How are these GIs funded? 
    • The buyer funds the invoice to receive the discount while it is active.
  • Can late payments generate rewards? 
    • No, the discount would be automatically dismissed.
  • Do early access fees apply? 
    • No. The seller is already offering a discount to incentivize early payment, which benefits both the seller and the buyer. 

Type 2 Guaranteed Invoices

  • How is it created? 
    • A buyer settles an invoice without a discount before its due date.
  • Do discounts apply? 
    • No but the buyer is rewarded by Bancoli by receiving Bancoli Rewards Points.
  • How are these GIs funded? 
    • Bancoli offers rewards to the buyer for early allocation on US dollar denominated invoices.
  • Can late payments generate rewards? 
    • No, rewards only apply when the buyer completes the early allocation of funds on US dollar denominated invoices.
  • Do early access fees apply? 
    • Yes. Since the Rewards to secure timely payments were provided by Bancoli, using the funds before the invoice due date incurs early access fees. This can be avoided either by offering discounts or by spending the amount on a Bancoli issued card. (virtual cards are coming soon to all accounts).

When transferring funds from your Bancoli account, you can access your Guaranteed Invoices (GI) and use them for payouts. Based on the type of Guaranteed Invoice, an Early Access Fee may apply if you want to access those funds. 

What is the difference between GI Type 1 and Type 2?

Type 1 GIs are created when a buyer funds an invoice with a seller provided discount, while Type 2 GIs are created when a buyer funds an invoice without a seller provided discount . 

On Type 2 GIs the Buyer receives Bancoli Rewards Points if the invoice is denominated in USD. Bancoli funds the Rewards Points.

  Guaranteed Invoices Type 1 Guaranteed Invoices Type 2
How is it created? A seller offers a discount to a buyer, who takes action to fund the invoice before the discount expires and receives the discount. A buyer settles an invoice without a seller-discount before the final due date of the invoice.
Do seller-provided discounts apply? Yes No
Can late payments generate Bancoli Rewards Points? NA Rewards only apply when the buyer completes the allocation of funds for USD-only invoices.
Do sellers incur early access fees if they want to use the GI funds prior the corresponding invoice due date? No

The seller is already offering a discount to incentivize early payment, which benefits both the seller and the buyer.		 Yes, if GI funds need to be used prior the Invoice due date, early access fees apply.
Can the Invoice generate Bancoli Rewards for the buyer? No Yes, on US dollar-denominated invoices.

Related information: Understanding Transfer Fees

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