Do you watch the BBC TV series Room 101, where celebrity guests send their least favourite things in the world to Room 101 for all eternity? We’ve all got our pet hates, but when it comes to invoicing your clients, there are probably quite a few processes you wish didn’t exist. By working with an invoice factoring company, invoice factoring is made easy and those dreaded processes are eliminated. We bet you’d love to banish some of these processes to Room 101, and now you can!
Long Payment Terms
Nobody wants to wait longer than necessary to be paid. Thirty, sixty or ninety-day payment terms can make running your business more stressful than it should be. Perhaps you work with suppliers who demand payment upfront or in 30 days, while your own payment terms are 60 days. This can have a real impact on your cashflow, leaving you short of cash and unable to meet your commitments.
Late Paying Clients
What’s worse than long payment terms, you might be thinking. Late paying clients. We’ve all been there; you issue an invoice with 30-day payment terms to a new client. You wait. You wait some more. When it’s been 2 months and you still haven’t received payment, chances are you’ve spent a fair chunk of time chasing down your client for the monies owed. Not only does this end up costing you money, it’s also a drain on your time and staff resources – but it can be avoided with invoice factoring.
Complex Payment Terms
If you work in the construction industry then you’ll be no stranger to applications for payment and retention clauses, where clients can withhold a percentage of your invoice until Practical Completion is reached. This is bad news for your business as you’ll need to find other sources of cash to pay your dues to Inland Revenue, pay your contractors and suppliers and meet your business commitments, until these funds are released.
If there’s one thing we like even less than late paying clients, it’s clients with no intention to pay whatsoever. These bad debtors have the ability to put you out of business, leaving you short of cash to pay your bills and in over your head. That’s where invoice factoring can help.
Invoice Factoring Made Easy
So, without further ado, let’s banish those invoice processes that give us all a headache to Room 101, never to be seen again. With invoice factoring, this is easily achievable – here’s how. You no longer need to wait 30, 60 or 90 days for payments on invoices. Your factoring company will release up to 90% of the funds tied up in your unpaid invoice within 24 hours, straight into your bank account.
No more chasing late paying clients, as this is something your factoring company can take care of too – simple! Construction companies will find invoice factoring offers a whole host of benefits, allowing you to move onto the next project even before Practical Completion, so you can meet deadlines and client commitments without waiting around to be paid.
Is Invoice Factoring Right For Your Business?
Invoice factoring is becoming an increasingly popular choice for businesses across a range of sectors, from haulage to recruitment and construction. Whether you’re a small start-up or a larger enterprise looking to expand, you’ll find invoice factoring is made easy when you use a broker to match you with the right factoring company for your needs – one with experience in your industry.
Late payment worries and bad debtors become a thing of the past (many factoring companies offer bad debtor protection) and you won’t waste time chasing down clients for payments, leaving you free to focus on running and growing your business.
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