Invoice Discounting is the process of selling bills to an invoice discounting firm for less than the invoice amount.
Invoice Factoring involves a third party between the buyer and the supplier. The third party is the factor, in this case, buying outstanding invoices from a corporation at a discount. This allows the company access to future funds and also gives the third-party factor a larger debt value.
Reverse factoring is a type of supplier finance solution that companies can use to offer early payments to their suppliers based on approved invoices. In reverse invoice factoring, the financial institution agrees to pay the invoices raised to the company by suppliers at an earlier date in exchange for a discount.