B2B newbie

[SouthernBusiness]

Hi,
I've always dealt with public. But now I have a chance to work with a supplier and deal with business to business. I'm concerned as I it would then be me handing out credit and what if the companies go bust. I was looking at RBS Invoice Factoring. What are the costs, I could see 1% this 0.5% that setting up fees and this fees. Has anyone used Invoice Factoring? Does it cover you for businesses going bust or just speeds up the bit between the business paying you ( as in RBS sub the money and awaits the delay ).

Also is there a decent bit of software that would be devoted to taking phone orders. The product range is small maybe 15 lines or something. But I would be dealing with larger companies than myself that are currently being supplied.

Any advice or tips?
I have couriers in place as trade online. I've got the business banking everywhere in place. Except the software but this would be a phoning through orders type of business maybe occasional email. I would just need to be able to track and see invoices etc.

 

[Chris Ashdown]

Credit control is a must and credit should only be made when contract values make it worth while i.e. not £25 orders every few months and B after they have brought for cash and built up a history. Dont be afraid of asking for cash, most companies now have business credit cards and find it far easier to use these than set up accounts.

Check out all companies who ask for credit, you may find many have been put on stop with current suppliers so looking for another mug to be their bank

 

[SouthernBusiness]

This is what worries me. I could stump up the £30k for the stock holding per month (as long as the sales continued) but not if customers demanded credit for 3 months etc. I was hoping this is what invoice factoring would help with?

I currently use suppliers for credit (but pay within 30 days) but now I'm on the other end and I don't want to wait lol.

 

[Ian J]

This is what worries me. I could stump up the £30k for the stock holding per month (as long as the sales continued) but not if customers demanded credit for 3 months etc. I was hoping this is what invoice factoring would help with?

That is exactly what invoice factoring is there to help with although RBS probably isn't the most obvious route for a new start as they aren't really interested in businesses that small.

Costs are variable dependant on turnover and volumes etc but if you want to chat through the options why not give me a ring and we'll see who is the most appropriate factoring company for you

 

[julliawilson]

Your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions. There is a great need for proper understanding of the business market and consumer history.

 

[Uzair Kharawala]

Invoice factoring is fine, but if the customer doesn't pay up say in 60 days, then the factoring company will/can take the amount of you. I would suggest you have a book keeper to keep a very close eye on your numbers and use something like Xero to help you with your book keeping / accounting. Hope this helps.

 

[Ian J]

Invoice factoring is fine, but if the customer doesn't pay up say in 60 days, then the factoring company will/can take the amount of you.

Not true. If someone has a non recourse facility the factoring company doesn't take the amount back ta all and if they have a recourse facility the period is generally considerably longer than 60 days

 

[Uzair Kharawala]

Thanks Ian. I stand corrected.