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Stories Tagged ‘Invoice Discounting’

 

 

 

 

If you are supplying staff via GRI you may struggle to find funding for your invoices. The good new is that the team at Funding Solutions can help you. Call on 0845 251 4040

 

GRI provide a great opportunity for agencies to benefit from large contracts. This means they can grow their business rapidly. However, it can present a cash flow challenge. If you are unable to access invoice discounting against those GRI invoices it may mean that you can’t take on the business. It is disappointing to walk away from such an opportunity.

Invoice discounting allows you to access up to 90% of the gross value of the invoices that you issue. This provides a flexible source of working capital that allows you to pay wages on time.

It may be that there are other types of invoice finance available that are better suited to your needs. This could be factoring where the lender undertakes credit control on your behalf. A similar solution is a CHOC’s facility where you undertake the credit control yourself.

Another option could be a full back office solution that includes finance, credit control and payroll. This is a fully outsourced solution that allows you as an agency to focus on sales and delivery.

It is interesting that the Domiciliary Care industry provide support to clients through at-home social and nursing care. This can relate to care provided for physical support, mental health, sensory impairment, learning disabilities and memory problems, as well as cognitive support. The industry primarily caters to local councils and state-funded individuals, both of which are funded by public sector tax receipts. However, demand for private provision has been growing over the past five years. Over the five years through 2019-20, industry revenue is expected to grow at a compound annual rate of 2.8% to reach £4.7 billion.

 

 

Invoice finance is now being offered by Investec Capital Solutions. This is after Investec Bank acquired Amicus Commercial Finance from the Amicus Group. Amicus had failed to secure a banking license as expected. As a result, Amicus undertook a strategic review across the group in order to reduce operational costs and ensure that its core short-term property lending business continued to grow. The sale of the invoice finance side of the business was after this failure. It must have been unsettling for staff and clients alike given that Amicus Commercial Finance was only established in 2015.

Invoice finance is typically provided by way of invoice discounting or factoring. It allows a business to access up to 100% of the gross value of outstanding invoices. It is a great source of working capital and smooths cash flow so you don’t need to worry about when customers pay late.

When considering which invoice finance provider to use you should consider 4 main areas:

1. Structure – if the facility is not structured properly it will not generate the cash you expect it to.

2. Pricing – the difference between the most expensive solution and the cheapest can be dramatic. It is also important to look beyond headline rates and consider total costs.

3. Service levels – they way you are treated by a lender is important. You are paying for a service and you deserve the best. Things such as stability, staff turnover and general attitude of the lender can make a big difference.

4. Security – ensure you understand what your liabilties are in terms of security requirements.

If you are looking for a factoring or invoice discounting facility why not undertake a complete market review using the simple 3 step form above. That way you can secure the most competitive terms in the market. Whatever your situation there is likely to be a lender that will meet your needs better than other invoice finance providers.

By using our expertise you can ensure not only that you get the best rates but also the best structure.

 

The permanent recruitment sector has historically been neglected by the invoice finance industry. There was a time when the industry would not finance perm recruitment companies.

So why was the perm recruitment industry neglected?

It was neglected because of the perceived risk involved in dealing with invoices that related to permanent placements. With temporary recruitment the rates are agreed, work is completed, timesheets are signed and invoices are raised. If the hours are multiplied by the agreed rates correctly there is very little that can be queried. In comparison, an invoice for a perm placement is raised when the candidate starts work and sometime before they have even started. What happens if the candidate does not show up on the first day? What happens if they walk out after their first week? What happens if the company finds they are not suitable and let’s the candidate go? Typically there are various rebates due depending on when they part company. As such there is no guarantee that invoices raised will be settled in full if at all.

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Invoice discounting has often been reserved for larger, well established businesses and smaller businesses have been forced to accept invoice factoring.

The good news is that invoice discounting can be accessed by smaller businesses.

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We are often approached for finance by someone starting a new start recruitment business.

New start recruitment companies can range from an individual setting up on their own through to large organisations with ambitious recruitment plans and everything in between. Whatever the size of the business cash flow is key to ensure that contractors wages can be paid on a weekly basis. This is why finance is important.

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Cashflow Finance is currently under construction as a resource to help businesses who are looking for cash flow finance solutions.

The site will be aimed at businesses who are seeking advice about their cash flow finance options.

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Smart Factoring Quotes have updated their new website to include a new and improved quotation tool.

As an independent and impartial invoice finance broker, Smart Factoring Quotes are keen to attract businesses looking for a new finance facility or a business looking to review their existing facility.

The new improved quotation tool takes into account the criteria of your business and provides a quotation that is bespoke to your business.

The quotation tool is also now accessible from each and every page on the website.

Confidential invoice discounting is the ideal invoice finance product for businesses that want to do their own credit control and do not want their customers to know that invoices are being funded. Confidential invoice discounting provides businesses with working capital and will prepay up to 90% of the gross invoice value.

Confidential invoice discounting can however be very hard to come by due to the criteria invoice finance companies put in place.

Lenders look beyond the basic invoice finance criteria of selling to other businesses on credit terms and invoicing in arrears of delivery. Lenders will look more carefully at a businesses financial performance and they expect a robust balance sheet. Equally important are the processes that a business employs to collect in outstanding invoices.