Confidential Invoice Financing – Fast Cash Flow
Get Cash Quickly With Confidential Invoice Financing
Most business owners focus on the wrong measure. They look at profit but if you ask any accountant they will tell you cash-flow should be your main priority. Of course you need to make profit but you can have a profitable business but without cash to pay your staff or suppliers, you will cease trading. “Cash is king” will always be true but having enough cash on hand is not an easy process especially when your customers want to hold onto their cash at the same time. How can you speed up your cash-flow or get a quick cash injection? One easy method is a process called “invoice financing.” Confidential invoice financing means that your clients do not know which helps with market reputation.
Why Is Cash So Important?
It seems an obvious statement that it is important to get paid for your goods and services yet thousands of companies go bust simply because they run out of cash by failing to collect what is due to them.
You may be a bit relaxed with your customers but there is no guarantee that your suppliers will be as patient as you. And you can guarantee that your staff will not wait until next month to get paid. They want their salary or wages, now, when they are due to be paid. If you are late paying your suppliers, more than likely, under their terms of trade, they can call in debt-collectors or take back the goods they have supplied.
Not only is this bad for your immediate needs – the goods or services you want to consume – it taints your image and reputation with them as future suppliers. Worse, if the process goes to debt-collectors, then your company will be shown on the register as a bad payer. This will affect your ability to raise credit elsewhere and could even increase the cost of your credit if you wanted to get a bank loan for example.
If your own customers are slow to pay, you should ask yourself why that might be the case? The usual reason is that they themselves are suffering from cash-flow issues and therefore they are at a greater risk of going out of business. That would be unfortunate but if you press for payment, at least you have your cash while other suppliers may lose theirs. Which do you prefer?
The last thought if you owe money to the tax office, do not for one minute think they will be lenient because you are a small business. They can and will take action.
What Is An Easy Way To Get Quick Cash In Your Business?
Assuming you have a good cash-flow management position with your customers, sometimes you may still need a cash injection. For example, you win a big contract and need to buy some additional components. One way to get that extra cash is to use a method called confidential invoice financing.
In simple terms, a finance company will consider taking-over or buying an invoice from you. The debtor is then liable to pay the value of the invoice to the finance company. This is a big advantage over traditional short-term lending as a bank for example will probably take a charge over your assets. An invoice financing service provider only takes a charge over that particular invoice.
And unlike factoring, you are not handing over your entire sales ledger. You select the invoice that provides the income you want.
Assuming a few simple criteria are met, your business can often receive 80% or even 90% of an invoice within 24 or 48 hours. Your customer is made aware of the situation to so that everything is transparent and above board.
So if you need an urgent cash injection, maybe to buy additional stock or components, pay a tax demand or to fund a marketing campaign, think about contacting a confidential invoice financing company like Fifo Capital, who may be able to provide you with short-term cash for your business.
Recent Comments