- 21 Feb
Do You Want An Improved Factoring Deal?
In many cases, when a company is using invoice finance are not completely satisfied with the service that they are receiving, they stay put in order to avoid any hassle associated with moving. However, there may be significant benefits to moving.
Read our Guide To Moving Factors.
The Benefits From Moving Factoring Companies
This recent case study was a fantastic example of the numerous benefits that you can enjoy if you decide to search the market and move move to an alternative provider. In this particular case, the company in question, a vehicle hire provider, was using a factoring facility from a bank operated factoring company.
Cash Allocation & Credit Control Issues
The key issues that they were experiencing were over cash allocation and credit control. They felt that cash allocation process was not satisfactory, cash was not being allocated to invoices in an expedient manner, when received from their customers. This had the effect of reducing the funds that are available to the company, until such time as the cash has been reconciled and allocated. Some factors have huge sums of customer money sitting unallocated - some pride themselves on having almost none.
Secondly, the client also felt that the credit control service was not up to scratch. I have written previously about the variations in credit control approach between different factoring companies. In some cases, a fully comprehensive service is provided, whereby you are handing over the entire process to the factor, who will undertake a comprehensive job, chasing all of your customers. In other cases, it is not such a comprehensive service. It can be that the credit control is really just offered as a risk control process, chasing the larger accounts, in order to protect the factor's investment - rather than deliver a service to the customer.
If you are not familiar with the variations in service delivery between different factors, you could find that you are receiving something less than a full credit control service. This can mean that you end up having to supplement the credit control yourself, or having to employ credit controllers in order to undertake the task. This can add significant cost and detract from the cost benefits of using a factoring company.
We were able to find this particular customer an alternative facility with a well-known factoring company, backed by substantial and well-known business that is a household brand. However, in addition to being able to solve their cash allocation and credit control problems, there were further benefits to be delivered to this particular customer.
Additional Benefits Of Moving Factors
Firstly, the new factoring company were able to provide an increase in the prepayment percentage, such that it would increase their repayments by over 6%. (as a proportion of the prepayment percent is that they received previously).
Furthermore, we were also able to save them approximately 30% on the cost of the facility that they were previously using. We were able to do this because one of the significant element of the cost was that they regularly triggered re-factoring charges. This was not because their customers were extremely slow paying, but because the majority of their debts were paid just passed the recourse period. This is the period after which a factor removes funding, and often charges a further "refactoring" fee at the same time.
The new factoring company were able to address this by extending the recorse period, this meant that our client saved a significant amount of money on refactoring charges that they no longer had to pay - not to mention the additional benefit of an extended period of funding which will help their cash flow.
This case demonstrates that whilst you are considering moving providers, in order to address a particular issue, you should look more broadly and seek and improved factoring deal overall. This can include a better service, increased prepayments, reduced costs and even reduced levels of security required (where appropriate).
- 24 Feb
Factoring With An HMRC Time To Pay (TTP) Arrangement
This is an example of a UK SME company that we were recently able to help find the funding to support their projected growth. In this case, the company was a small driver recruitment company within the temporary recruitment sector, and they were looking to grow their turnover substantially to a single customer.Use of invoice funding within the temporary labour sector is very common, and it is...
- 03 Feb
Invoice Finance Based In Southern Ireland (Eire - Republic Of Ireland)
We dealt with an interesting case recently where the location of the prospect was a key issue.We were asked to assist a staff recruitment company that provided temporary contractors to various parts of mainland Europe.The key issue with this particular prospect was that they were due to move their offices to Southern Ireland (also sometimes called Eire or the Republic of Ireland) - so they...
- 09 Dec
Funding For Accountants With Poor Sales Ledger Ageing
We have just been able to help a company of accountants find a factoring facility after their existing provider sought to terminate their facility due to the ageing of their sales ledger. So if your factoring company want to terminate your facility, don't panic and get in touch to see how we can help you.CONTACT FUNDINVOICEAccountants are often paid late, it is an issue that seems to dog the...
- 15 Jul
Replace Your Cancelled Invoice Finance Facility
We have just been able to help a small steel fabrication business that were are using a selective invoice finance company, that wanted to cancel their invoice financing facility.The business deals with a number of construction sector customers, and hence a lot of their sales are billed via applications for payment, rather than invoices. The use of applications for payment, which is commonplace in...
- 30 Apr
30K Business Loan For A Vending Machine Supplier.
Vending machines is one of the diverse sectors that we have been able to assist recently. We recently helped a supplier of vending machines arrange a long term business loan. The loan was for £30,000 over a long term, which will provide a significant capital injection for their company.MORE INFORMATION ON BUSINESS LOANSWhilst this was a relatively modest loan, we are able to help arrange much...
- 17 Apr
Diverse Trades That We Have Found Funding
Whilst looking through recent deals that we have completed to find a few for case studies that I can add to our website, it struck me what a diverse range of different trades, and industry sectors, we have arranged funding for recently.The variety of types of business finance that we can arrange for companies, means that there are options whatever your industry sector.These are just a few...
- 29 Mar
Overcoming Constant Changes Of Client Manager
Service problems are rare in the invoice finance sector, but when they do arise, we have had some success helping clients solve service problems.REQUEST A CALL IN CONFIDENCEWe have just assisted a client who was using a bank owned invoice finance company, but they had suffered continual staff changes. After having the same Client Manager, the individual - often called a Relationship Manager - for...
- 04 Mar
Savings On Factoring For A Recruitment Company
Interesting recent case where a potential cost saving has been identified for a medium sized recruitment company, currently using non recourse factoring.The prospect was using a non recourse factoring service (which can have its benefits), from a large provider, but they were seeking a cost reduction exercise, and they wanted a better service. They felt that the provider was no longer keen on...
- 15 Oct
Credit Control For A Small Construction Estimating Business
We have just completed a credit control only facility for an estimating business that handles:DISCUSS A CREDIT CONTROL QUOTEThis firm of estimators were originally with a large high street bank, who have an invoice finance arm, but as the bank have withdrawn their debtor protection this client needed to look for a new provider. The facility that they had received from the bank was factoring but...
- 31 Jul
Invoice Discounting For An Electric Bicycle Distributor
Electric bicycles, or e-bikes, are a fast growing market, as many people seeking to live a greener life and replace their journey to work in a petrol or diesel powered car, with something less polluting.We were recently able to arrange a confidential invoice discounting facility for a UK based distributor of electric bicycles, in order to support their future growth.GET A QUOTE FOR INVOICE...
- 26 Jul
Selective Invoice Finance For Installation Of Car Charging Points
This case study concerns a client in a very different industry sector that we were able to find a selective invoice finance facility.GET A FUNDING QUOTEThe small business was an installer involved with the installation of car charging points for electric cars. They also undertook some solar panel installation, under the Government's green deal scheme.Car charging points, for electric cars, are...