Your Business and the Case of Receivables

In the life of Mark Tull, you work, you charge, they pay. It is the natural order of things – or it should be. It is easy to expect that, in any reputable business, the receivables you have lined up for your services and goods will eventually result in revenue and cash flow. Many businesses rightly focus on offering the best products and services at competitive market prices while growing their brand, to ensure their business is successful. They see slight delays in payment as unavoidable and negligible in cost to the business. But there are significant risks to your business that can be caused by problems with receivables. Luckily, there are also significant solutions provided by expert firms. This step-by-step guide will show you how such firms can help you navigate such problems.

You wait for an invoice

Firms such as Close Invoice Finance can step in when these delays in payment become unmanageable. Imagine you run an SME and your business is booming. Yet despite your assets, you carry a degree of debit and so are unlikely to be able to draw upon a reliable line of credit. When your receivables suddenly become delayed, to the point you are struggling to maintain the payments your expenses require, let alone think of the growth that your booming sales warrant, these firms are the solution to turn to.

You don’t have good cash flow

Because firms like Close Invoice Finance are experts in cash flow management they can not only assess the problems you have, they can also provide a unique solution. Late payments can be frustrating and cause a problem with your cash flow because, despite the fact that you may have pieces of paper or online notices declaring that money is owed to you, the timing of when that money will arrive does not serve your business plans and processes.

The firm uses your invoice as collateral

At this stage, after you have become aware of the cash flow problem caused by late payments, companies such as Close Invoice Finance can step in with payment solutions. One of their most successful strategies is assessing the amount of receivables that you have owing to you, then fairly and quickly providing you with the finance you need. They are effectively allowing you to borrow against the money you have owing to you.

The firm buys your invoice

A second and very similar strategy that Close Invoice Finance, and firms like them, will employ is the use of factoring. This effectively constitutes the firm buying your receivables from you and managing them as their own. In this way you can sell your products and services and then, instead of waiting for payment, hand over that responsibility to these firms in return for immediate liquidity you can use to pay your expenses and invest in growth.

4 Problems That Can be Solved With Invoice Finance

No business blooms on fear, but any new start-up, company or project should not arrogantly be blind to their weaknesses. True business strength is developed from understanding, facing and assessing the potential faults in any venture, then working on reasonable and effective strategies for managing these faults.

Before any business can flourish, its owners and managers need to take some time to stare into the abyss. While it is easy to envision ambitious and grand schemes of success, it can be tougher to make a sober analysis of all the ways things could go wrong. But when you do so you may notice that these five problems are not only hazardous, but also endemic to many SMEs. Yet once you are aware of them you can seek the appropriate expert help to face them head on, with zeal.

Insecurity

Much of the fear that dwells in the mind when you are about to embark on a business venture is tied to insecurity. Here is where expert firms such as Close Invoice Finance can step in and help. What if my meagre assets are not enough collateral to invest in this venture? What happens if my cash flow becomes strained and I am forced to resort to potentially strangling credit? What if, down the track, this credit becomes harder to procure just at that moment when growth is vital? These firms offer pinpoint and creative solutions outside of the banks.

Poor cash flow

Any SME needs to envisage a time when poor cash flow will frustrate investment and stifle profit. Firms like Close Invoice Finance are professionals in making sure you have a wise and adequate plan to ensure money keeps coming in – not only to pay for expenses but also to plan for growth. They can analyse just where you may be going wrong and also provide innovative yet reliable ways to finance your investments at moments when your cash flow is at its the weakest.

Late payments

One of the key causes of poor cash flow, which firms such as Close Invoice Finance target head on, is late payment of receivables. Any SME must plan ahead and conceive of a time when they have made many sales and done solid business but the payment for their goods and services is delayed in such a manner that they do not have cash flowing in to meet expenses, pay off credit or invest in growth. Invoice discounting and factoring can provide near to instant income and solve the problem of inflexible payment schedules.

Bad Debt

Finally, companies like Close Invoice Finance can assist with the ever-looming monster of bad debt. Often, SMEs will respond to problems of cash flow by borrowing, but this can lead to high interest loans and, ultimately, bad debt. These firms provide generous yet reliable solutions, such as asset based loans, to help business cope with this problem.

5 Top Reasons to Use Invoice Finance

Any small to medium business enterprise knows there will be tough times. This awareness that the most profitable periods will inevitably be met with times when revenue lulls will pose sober questions to even the most ambitious entrepreneur.

But if an enterprise can deal effectively with cash flow problems in good times, they can have confidence to face the threats posed in tough times. And there is no better way to effectively deal with cash flow than by following these expert strategies.

Cash flow solutions

Consultation with firms like Close Invoice Finance can greatly assist businesses to improve their cash flow. Cash flow is vital not just to maintain the daily running of an SME, but it also as the portent of growth. These firms can provide adequate assessment and offer a variety of solutions not on offer at big banks for SMEs keen to maintain solid cash flow, then use it to invest in potential growth to shore up in difficult periods.

Invoice discounting

One of the key strategies that firms like Close Invoice Finance can expertly provide is the discounting of receivables. Many SMEs find their cash flow crippled when the multitude of receivables they charge to companies become backlogged or delayed and the expected revenue does not flow in a manner to support investment. These firms will lend against the receivables so you can receive up to 90 percent of what is owing to you within 24 hours of issue.

Factoring

In a similar fashion, factoring addresses the issue of delayed receivables. Often confused with discounting, factoring does not involve a loan or line of credit so much as it construes firms like Close Invoice Finance buying the receivables and taking responsibility for their payment. For an honest fee they thereby provide SMEs a proven solution to the cloud of papers and unpaid notices that can clog up a business.

Asset based lending

One of the main reasons SMEs can be crippled by late payments is they lack the line of credit from banks to invest while they are waiting for payments to be paid. Expert consultants and companies such as Close Invoice Finance help SMEs avoid this issue by making careful analysis of a company’s finances, and providing accurate, fair and useful lending based on the assets the company has in their name.

Debt protection

More often than not, an SME will prefer not to take on a hefty interest rate or large chunk of credit from a bank when they are trying to maintain investment and cash flow. The same firms that offer these expert strategies can also provide detailed advice on how to protect against bad debt, thus enabling your company to not only beat the problems of delayed income and payment, but also have the confidence to know they are strong in assets and low in debt.

Invoice Finance: A Safe Path to Better Cash Flow

If you’ve always been wary of securing financing for your business needs because you’ve been warned about the potential dangers of borrowing for your business, there’s an option you may want to investigate. Specialised companies such as Close Invoice Finance provide the modern and more practical solution for more and more businesses these days.
What Is Invoice Finance?

Invoice finance is a form of asset based lending offered by many reputable financing institutions – including RBS, HSBC and Close Invoice Finance. Offering a range of flexible and affordable options, it allows businesses to obtain cash against a percentage of their receivables. Two of the most popular types of invoice finance are factoring – where the lender takes care of collections – and invoice discounting – wherein you collect the receivables yourself and pay advances to the lender through dedicated accounts.

Benefits Versus Traditional Credit Facilities

Almost every businessperson would be aware of traditional financing options– both the good and the bad. Those with low interest rates (such as overdrafts and bank loans), have plenty of reporting requirements – like historical reports of sales performance, a listing of assets, as well as red tape and long processing times.

On the other hand, there are other traditional (yet a little bit less reliable) sources with faster processing times and fewer reportage requirements; but these may have prohibitive interest rates, which, if unchecked, may be your downfall. Companies such as Close Invoice Finance, on the other hand, offer faster processing times and fewer requirements; practically, the only requirement is a healthy sales ledger that shows the minimum required turnover or sales.

Security And Planning

With traditional options, accounts receivable can be a source of insecurity, since there is no way to tell when, or even if, you will be able to collect. It is an insecurity that is heightened with the payment commitments that you are required to meet. Whether it is weekly, semi-monthly, monthly or quarterly, it creates a huge stress making sure there is enough in the till to pay increases as the cut-offs draw close. Invoice finance allows you to know your cash flow projection in detail, enabling you to make business plans that will allow you to grow, instead of simply keeping up with commitments.

Reputable finance providers, such as Close Invoice Finance, include in their services the collection of receivables (in the case of factoring) as well as credit check services on your potential clients so you can avoid bad debt. Unlike traditional facilities where the problems posed by a non-paying client are heightened by the prospect of you being unable to pay your debt to the financier, invoice finance removes that added burden, should your customer be unable to pay.

Flexibility

There’s also the added worry when debt repayment deadlines and overdraft limits draw close: invoice finance can eliminate that headache. Being a flexible facility¬ (which means as your invoice values grow, so does the facility), there is no need to keep applying and reapplying. Whether you opt for factoring or invoice discounting, you are assured of a series of cash advances that increase as you sell more and your turnover increases.

Invoice Finance: A Safe Path to Better Cash Flow

If you’ve always been wary of securing financing for your business needs because you’ve been warned about the potential dangers of borrowing for your business, there’s an option you may want to investigate. Specialised companies such as Close Invoice Finance provide the modern and more practical solution for more and more businesses these days.

What Is Invoice Finance?

Invoice finance is a form of asset based lending offered by many reputable financing institutions – including RBS, HSBC and Close Invoice Finance. Offering a range of flexible and affordable options, it allows businesses to obtain cash against a percentage of their receivables. Two of the most popular types of invoice finance are factoring – where the lender takes care of collections – and invoice discounting – wherein you collect the receivables yourself and pay advances to the lender through dedicated accounts.

Benefits Versus Traditional Credit Facilities

Almost every businessperson would be aware of traditional financing options– both the good and the bad. Those with low interest rates (such as overdrafts and bank loans), have plenty of reporting requirements – like historical reports of sales performance, a listing of assets, as well as red tape and long processing times.

On the other hand, there are other traditional (yet a little bit less reliable) sources with faster processing times and fewer reportage requirements; but these may have prohibitive interest rates, which, if unchecked, may be your downfall. Companies such as Close Invoice Finance, on the other hand, offer faster processing times and fewer requirements; practically, the only requirement is a healthy sales ledger that shows the minimum required turnover or sales.

Security And Planning

With traditional options, accounts receivable can be a source of insecurity, since there is no way to tell when, or even if, you will be able to collect. It is an insecurity that is heightened with the payment commitments that you are required to meet. Whether it is weekly, semi-monthly, monthly or quarterly, it creates a huge stress making sure there is enough in the till to pay increases as the cut-offs draw close. Invoice finance allows you to know your cash flow projection in detail, enabling you to make business plans that will allow you to grow, instead of simply keeping up with commitments.

Reputable finance providers, such as Close Invoice Finance, include in their services the collection of receivables (in the case of factoring) as well as credit check services on your potential clients so you can avoid bad debt. Unlike traditional facilities where the problems posed by a non-paying client are heightened by the prospect of you being unable to pay your debt to the financier, invoice finance removes that added burden, should your customer be unable to pay.

Flexibility

There’s also the added worry when debt repayment deadlines and overdraft limits draw close: invoice finance can eliminate that headache. Being a flexible facility¬ (which means as your invoice values grow, so does the facility), there is no need to keep applying and reapplying. Whether you opt for factoring or invoice discounting, you are assured of a series of cash advances that increase as you sell more and your turnover increases.