Invoice finance is continuing to prove invaluable to small business in the UK looking to growth and move positively into the rest of 2012. Figures have shown that this method of financing has grown annually, as well ass helping businesses expand and boost their sales figures.
In the UK and Ireland, invoice finance, which includes selective factoring, invoice discounting and factoring, has grown annually by 7% over the past few years. In 2011, businesses using invoice finance saw an average growth in sales of 13%. This is welcome news, especially with the gloomy UK economic prospects for the year – especially when it comes to growth.
Yorkshire Bank found these figures during a recent survey of small businesses. With late payment an ongoing problem for businesses, it makes sense that we are seeing a growth in the finance measures that can directly attack these issues.
Invoice finance can help businesses that are struggling to collect payment from customers within a reasonable time frame. These issues with debt collection spiral down supply chains, so those companies at the bottom of the pecking order are forced to wait long periods for payment. This has forced many businesses with otherwise healthy order books to either close their doors or cut back on their growth plans.
As we can see from the rising popularity of factoring and invoice discounting, many businesses are looking for a way to release the funds tied up in unpaid customer invoices. And, as the boost in sales shows, doing so can be beneficial for their bottom line. However, there’s always value in improving our credit collection, such as making payment terms clear and all conditions are upfront – you could even offer incentives for early payment.
Select Factoring has a range of invoice factoring solutions, ideal for a whole range of businesses. If your company issues invoices of 30, 60, or 90 day payment periods, then you could benefit from looking into alternative means of finance.