Maintaining a harmonious balance between collecting revenue from invoices and cash flow within the firm is a constant challenge for many business owners. In fact, many business often find themselves in more trouble when they cannot keep their books balanced. Often, a single event moment triggers this chain reaction and business owners have to find a way to restore the balance with the help of a third party.
Balancing the sheets is no easy task and often, businesses accumulate invoices for their clients that either have been delayed payments or in fact no payment at all. In this particular scenario, invoice financing can be a solution that will get the firm their much-needed income from client payments and decreasing their liability from suppliers or creditors.
Invoice financing has two distinctive processes – Invoice Factoring and Invoice Discounting.
Invoice Factoring is a process where your invoices are surrendered to a third-party finance company that will collect unpaid and new invoices for your clients. In return for the invoices (and its level which will also serve as a security), the finance company will maintain a certain percentage of invoice from the business and release cash based on the percentage of the business’ invoices.
The finance company, in return, will collect from clients and customers who have missed or upcoming payments. The finance company will also issue a service fee for the business, will charge an interest rate for the invoices and may not accept invoices that it perceives as bad risks.
In all, this can be a win-win situation for both the business and the finance company especially since the loan for the business can easily arranged in days.
In reverse, Invoice Discounting is the process and scenario where the finance company will not pursue clients in the business’ behalf and the latter is beholden to collect payment from its customers and clients.
Another related process is Spot Financing, where the business can release income from a single/one-off invoice. It can work in harmony alongside a bank overdraft or loans.
N & T Consultants can help you if you’re business is waiting too long to get paid by your customers. If your business is suffering because it’s waiting for 30 to 90 days to get paid, we can provide cost-effective solutions to help you get paid much quicker.
Our team will speak with you to understand what your business requires and aim to give you a written decision in principle (DIP) quickly, to enable you to find out what funds are available at no cost, no obligation.
Even if you have an existing invoice finance facility please contact us for a no cost, no obligation review. We may be able to find you a better deal, improving your cash flow even further.
Case Study for Invoice Finance
A large distributor of electrical products, based in Birmingham commissioned N & T to review his existing Invoice Finance funding arrangement with his bank. He was particularly unhappy at the fees/charges, the level of personal and business security required by the bank and the time it took to fund invoices.
We arranged a Spot Finance Invoice Funding facility, which was unsecured (no personal or business charges therefore), more cost-effective and payment of invoices were made in 24 hours!
The client has been using this more flexible, cost effective and easy to use facility for over 24 months now and subsequently the turnover has increased to £15,000,000.
Naturally, N & T have been working with the client to date on other cost-effective funding solutions for his expanding business.
Look no further than N & T Consultants Ltd to help you find the right Invoice Finance facility.
Call us NOW about our Invoice Finance solutions on 0333 5777 220, in the STRICTEST of confidence or complete our online contact page for immediate help and a NO COST, NO OBLIGATION telephone consultation or meeting at your convenience.
We look forward to assisting you!Go back