Business can be a fast paced environment, where opportunities need to be snapped up before they are taken by the competition. However they can all too often be held back by a lack of cash flow, and by the cycle of invoices and 90 day payment terms.
The process of issuing invoices and raising statements and listening to endless phone calls that all say the same thing “we’re just waiting on an overdue contract being paid before we can pay you” can stifle a business.
At this point it’s worth considering how invoice finance can help your business:
1. Improves Cash Flow
If you are a company that invoices in arrears then receiving your funds in advance of payments can help with the day to day running of your business. While customers might want to pay you when they themselves get paid, your staff and suppliers still need satisfying. With access to cash, you can take advantage of purchasing in bulk or initiating developmental or expansion plans.
2. Speedy Payments
Every business is ultimately at the mercy of their debtors’ payment schedules. Can you really afford to wait 60, 90 or even 120 days for payment? Having an invoice finance facility will allow a company to be paid in a timely fashion for services and products that have already been supplied.
3. Improved Credit Relations
Having access to funding as soon as you invoice can help you pay off your creditor accounts in good time too. Establishing prompt payment of your own purchase invoices establishes a better credit history and this means increased credit limits and better payment terms with suppliers. This will often signal better purchasing power as more suppliers will want to work with you, reducing prices and establishing stronger supply chains.
4. Credit Control
Retaining credit control is a must for some businesses and a pain in the neck for others. With invoice finance the choice really is yours. What really helps with an invoice finance facility is the added security of credit insurance. It’s never nice to say ‘no’ to a customer, but when their credit history and exposure limits them to a certain credit limit, then it can save your business from a hefty financial hit if and when they go bump.
5. Flexibility
Invoice finance is funded against a business’s sales ledger so as the one grows so does the other. This means that having the flexibility of a growing drawdown can increase growth and development opportunities.
6. Paying HRMC
If your company finds it difficult to meet the demands of your payroll, or worse HMRC, then not having enough cash to pay them off with is one way your company can fall down. Even though you may have plenty of orders on your books and a large debtor balance, it doesn’t always translate into ready cash. Invoice finance removes this worry.
Invoice finance helps with your cash flow, which is one of the biggest assets of a successful business but it can also alleviate some of the major concerns and risks of taking on new customers as well as managing your exposure to them. It certainly isn’t a magic financial pill, but it can certainly help your business function more efficiently.
To discuss the funding options available to your business. Please do not hesitate to contact us on lynnew@regencyfactors.com and we can arrange contact via Facetime, Zoom or WhatsApp to discuss funding “Face to Face”
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