If you’re a sole trader, small or medium business, you may at some time been the victim of a late payer. It’s so frustrating and with larger companies, we always hear tricks of keeping the money in their accounts as long as possible to gain more interest, but that doesn’t build good working relationships.
Working on your own and trying to chase up payments can be a nightmare, you feel like a total pest, but at the end of the day, if you’ve done the work, you deserve to be paid and promptly, not three months later. If however the client has agreed with you a payment term or taken it upon themselves to extend their invoice payment to 90 days you could end up being stuck in a financial rut.
Luckily there is an option to combat late payments, which doesn’t involve baseball bats and big men being sent round to your client. It simply involves factoring.
If you’re a predicament and need some cash pronto but know its going to be at least a month before you see any payment from your clients, factoring is a great solution, its quick its simple and its cost effective.
If you have invoices to send out to clients they will hold an amount of money that the client owes you. This money can be released as capital from a factoring lender, and you can have the cash up from within 24 hours. Another great feature of Factoring is that you can pass all of your invoices over to the factoring lender, get the cash up front, and let the lender carry on in chasing payments from your clients. Otherwise, if you still want to be in control of the process of chasing payments you can still choose to do so.
This eliminates late payments and allows you the cash up front, plus using this facility is a tiny cost compared to the money you may spend waiting for your clients to pay up!