Invoice discounting is a financial arrangement that allows businesses to access cash quickly by borrowing against their outstanding invoices. Instead of waiting for customers to pay their bills, companies can receive a percentage of the invoice value upfront from a lender, which helps improve cash flow and manage operational expenses. In this process, the business retains control over its sales ledger and continues to collect payments from customers. Once the customers pay their invoices, the lender receives the payment, and the business pays back the borrowed amount plus any fees. This method is often used by small and medium-sized enterprises to maintain liquidity.