Publisher and advertising receivables

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Publisher and Advertising Receivables

Operating in the publishing and advertising space is not easy. When you are a publisher or advertiser providing services, sometimes you have to wait for months before your clients make the payments.

The lifecycle of funding in the publishing and advertisement ecosystem begins as soon as you decide you want to advertise or publish.

The business may come from small organizations as well as large multinationals. Hence, the size of these companies puts them in-charge of dictating the payment terms to publishers and advertisers.

This often includes extended payment terms, squeezing you for every dollar they spend. Thus, for publishers and advertisers, receivables finance is the most viable solution to alleviate pain in working capital flows.

Publisher and Advertising Receivables: A Convenience for Growth

Financing publisher and advertising receivables allow businesses to continue to operate by helping to meet their expenses, by discounting the receivables in relation to their income. Nowadays, a publisher usually pays for promotion but does not get paid on advertisement revenue until later.

To stay competitive, intermediaries offer favorable terms to pay their publishers. However, these intermediaries get paid by their clients on less flattering terms.

To get a new client on board, ad agencies at times have to expand their resources. However, they do not get paid immediately and often have to wait for 120 days.

By factoring publisher and advertising receivables, all parties, including intermediaries, publishers, advertisers, and agencies, can have free cash at their disposal. This cash flow helps them promote their business, take on new projects or clients on board, and payout publishers.

Receivables Helps Bridge the Funding Gap

Receivables finance can help publishers and advertisers bridge their funding gap, while waiting for the payments to come through from their clients or partners. This financing comes in the form of factoring or discounting their advertisement and publishing sales revenue.

If you are in the publishing and advertising industry, you can get funding often on a daily basis. This will help you cover your immediate operational expenses for 30 to 120 days. Once you have the payment, you can always pay back the financing institution as per the terms they offer.

How it Works

The process is straightforward and entails four basic steps. Once you contact the factoring or receivables finance company, they will look at your payment schedule and assess the creditworthiness of your pending invoices, partners, and customers.

In the next step, they will verify your invoices via direct human contact. If the ownership structure appears clean and the factoring or receivables finance company does not see any red flags during their diligence (such as a pending bankruptcy, etc.), they will wire you the proceeds of the receivables (minus an agreed discount).

Typically, turnaround time is three working days. After that, follow the process mentioned below.

  • Submit all your invoices at the end of the month for funding approval each month.
  • The factoring or receivables finance company providing you the financing facility will evaluate them; they will either approve or deny every invoice individually. Their reason for denial may include recent discovery of bad credit reports of your customer/s, or the factoring institution may have reached its internal limit of how much funding they can offer you.
  • However, if your invoices get approved, the factoring company will transfer the agreed percentage of each invoice the same or the very next working day.

The beauty of the publisher and advertising receivables is flexibility. You are not obliged to sell all your receivables to a factoring company; you can choose against which invoices you want to get the receivables funding.

Additionally, the receivables’ fee is usually pro-rated and on a daily basis too. Therefore you do not have to pay a full month’s fee if you will use this funding for a few days or weeks. You pay the fee for the days you utilize this facility.

Types of Receivables finance

Publisher and Advertising receivables financing mainly comes with two options. In both cases, the goal is to grant the publishing and advertising companies immediate cash to run their operations smoothly.

Invoice Discounting

In this type of receivables financing, a publishing company will sell its invoices and other receivables to a financial organization or private financer and get immediate cash. When these invoices become due, the company will collect the money from the customers and pay back the financing company along with an agreed fee.

Invoice Factoring

In this case, the financer will not only provide cash to the publishing business but also take on the responsibility of collecting the money from the customers when the invoices become due.

For example, a publishing or advertising company has to take on a new project, but they will not get the payment on their pending invoices from the clients for the next 30 days. This company will contact an invoice factoring or receivables finance organization for immediate access to cash against the pending invoices.

However, invoice factoring will offer a certain percentage amount against the invoice’s full value, such as 96% of the total invoice value. When the financer receives full payment from the customer, the additional 4% will be retained by the financier. That is how invoice factoring companies generate their revenue.

The financer will also be responsible for collecting the money against all pending invoices directly from the customer. It also saves the borrowing company a lot of time, effort, and resources.

Receivables Financing: Pros and Cons

It is important to know that publisher and advertising receivables are a form of debt. Thus, there will be associated liabilities and expenses accompanying it. However, receivables financing has its own set of advantages and disadvantages just like any other financing model.


  • First and foremost, good news! Receivables financing is a form of short-term unsecured loan. It usually means you do not need collateral, such as assets and guarantors, to acquire this financing option (outside of receivables).
  • You retain 100% ownership of your company, meaning you can take on receivables financing options without giving up a share of your company to the financer.


  • The biggest shortcoming of publisher and advertisement receivables is the associated cost. It may give you access to immediate cash, but the financial organization extending the facility may charge a high fee for their service.
  • The agreements can be lengthy and come with various long-term commitments and obligations. Therefore, all companies considering publisher and advertising receivables must carefully negotiate these terms and conditions.

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About the Author

Nikhil Patel is a journalist at Trade Finance Global, covering commodity finance markets, trade technology, and cash / treasury management.

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