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
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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.
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Do discounts apply?
- Yes, a discount is offered to the buyer.
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How are these GIs funded?
- The buyer funds the invoice to receive the discount while it is active.
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Can late payments generate rewards?
- No, the discount would be automatically dismissed.
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Early usage fee?
- No. The seller is already offering a discount to incentivize early payment, which benefits both the seller and the buyer. Therefore charging an early usage fee to the buyer would be counterproductive since it would minimize the discount benefit.
Type 2 Guaranteed Invoices
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How is it created?
- A buyer settles an invoice without a discount before its due date.
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Do discounts apply?
- No.
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How are these GIs funded?
- Bancoli offers rewards to the buyer for early allocation of USD-only invoices.
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Can late payments generate rewards?
- No, rewards only apply when the buyer completes the early allocation of funds for USD-only invoices.
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Early usage fee?
- Yes, for external transfers on any plan and Internal transfers in Starter and Plus plans. This fee does not apply to Premium and Enterprise plan businesses.
When transferring funds from your Bancoli account, you can access your Guaranteed Invoices (GI) and use your Bancoli Rewards to pay transaction fees. Based on the type of Guaranteed Invoice, an Early Access Fee may apply if you want to access those funds.
As a reward for other payments you have made in Bancoli, you can use your Bancoli Rewards Points to pay any transaction fees, such as an Early Access Fee. Think of air miles but for transfers.
What is the difference between GI Type 1 and Type 2?
Type 1 GIs are created when a buyer funds an invoice with a discount early, whereas Type 2 GIs are created when a buyer funds an invoice without a discount before its due date.
Unlike type 1 GIs, there are no discounts offered for type 2 GIs.
An early usage fee may be associated with Type 2 GIs, depending on the type of plan the buyer is on, whereas Type 1 GIs never incur one.
Type 2 GIs come with Bancoli Rewards Points if the invoice is denominated in USD. Bancoli funds the rewards and can't be generated for late payments.
This information is displayed in this table for simplicity:
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 discount before its due date. |
Do discounts apply? | Yes | No |
Can late payments generate Bancoli Rewards Points? | NA | Rewards only apply when the buyer completes early allocation of funds for USD-only invoices. |
Early usage fee? | No The seller is already offering a discount to incentivize early payment, which benefits both the seller and the buyer. |
Yes, for external transfers on any plan. Yes, for Internal transfers in Starter and Plus plans. This fee does not apply for businesses in Premium and Enterprise plans. |
Can it generate rewards? | No | Yes, for USD-only invoices. |
Related information: Understanding Transfer Fees