How can invoice discounting and factoring help your business with cash flow problems? This is a common issue for many businesses, big and small, so it’s worth addressing the problem head on. Successful business management often relies upon the careful management of cash so it’s worth making sure your cash flow is healthy. This is something that invoice finance can help with.
If your business is regularly facing obstacles in paying suppliers, payroll and HMRC then it might be a good idea to consider invoice finance. Even if your sale book is full of orders, if customers aren’t paying, then you’ll be tight on cash – this is something that can cause the failure of many companies. However, your sales ledger can act as a great way to unlock working capital in order to help your business with its day to day running.
Invoice finance is a way to bridge the gap between issuing invoices to customers and receiving payment. Many customers will delay payment, whether they’re struggling with cash flow issues of their own or are caught in a supply chain, so you could be left waiting for weeks for payment. An invoice finance provider releases a set percentage of your invoice value within 24 hours, helping you get access to the funds you need within 24 hours.
This is a flexible way to release the funds tied up in your order book. If you sell on credit to other businesses with invoice terms of 30-90 days then your business may be eligible for factoring or invoice discounting. Invoice finance grows in line with your business, so the more you sell the more money you can release – this makes it a great solution for cash flow and late payment problems. If your business needs a flexible, accessible way to raise working capital, then it could be worth a call.