Cash for Invoices

[Rose&thyme]

I’ve been looking at getting cash back on some of my outstanding invoices. What is the difference between a bank and one of the dedicated companies (Bibby etc) who come up in Google.

Also – the invoices I have are for recruitment services – I therefore don’t have any physical products as collateral – will this still work??

 

[carolynefairey]

Hi,

I am in the business that you are talking about. Our service is a low cost web-enabled invoice chasing service. We have clients that we have reduce debtor days from 90 to 62. We do not take a percentage of the invoice it is a set fee, which helps with budgeting.

If I can help pm me.

 

[GRDCredit]

Need a bit more info to be honest OP.

Are you talking about invoices which have gone overdue and you are now looking to 'sell the debt'

Are you talking about factoring - i.e. you raise an invoice, send it to your client and get an immediate cash advance from the factor company. If so have a word with IanJ or Kevin

I would, naturally enough, say that good credit control procedures may also be an option but this won't get you paid early, we would just try to get you paid on time!

 

[malcolmpiper]

Hi,

To answer your question directly the banks and independents offer the same basic facility, however typically (banks not excluded) with an independent you’ll get a dedicated account manager and a more personal service.

It really depends what you’re looking for from a facility.

Tandem Invoice Finance Limited focus on flexibility and customer service by offering a facility for individual invoices – simply put: single invoice discounting for a single fee and no ongoing commitments to continue using our service.

You can keep this facility in your back pocket until your company needs a cash flow injection.

I personally have a great deal of experience in the recruitment sector and there’s a lot more information on our web site.

 

[Perry Burns]

Most large factors insist that you sell your whole book and will demand a minimum commitment. Although it is a very useful tool for financing growth it does depend on continuing growth of your business and if activity trails off, then it can cause a problem and be very hard to get out of.

With Selective Single Invoice Discounting you remain in complete control and the faciltiy resets itself as soon as your customer has paid off the invoice.

Like Malcolm I would be more than happy to chat through the options with you if you like. Give me a call on 0800 028 6585

 

[cpcm credit management]

I would seek out a invoice discounting/factoring broker and take it from there. It is a complex market, but no cost to yourself

I know a very experienced and well respected contact if you would like to drop me a line

 

[simon.hampton]

Hi

we have helped recruitment firms with this, without the need for financing. give me a buzz on 02071005978 and I will see what we can do

 

[Steve Thornbury]

And if you don't get paid you know where to come!

 

[Geoff T]

And if you don't get paid you know where to come!

I'd hope they do by now Steve - otherwise what are we doing here??

 

[saxondale]

And if you don't get paid you know where to come!

whats "hateinvoicing" .............. is it where you`re really strict?

 

[Steve Thornbury]

Hateinvoicing in a nutshell...........
Current situation
Send client invoice cross fingers If paid Horay If not many issues to follow

By Using Hate Invoicing
Send 2 invoices 1 to client 1 to me
I'll chase and smooth out any problems within 24hours thus getting you paid on or before day 30
25% of my clients are getting paid on the day the invoice is raised.

In my experience the major reason for non-payment is a problem with the goods / service that you provide. I'll strip away all the issues on day one and resolve all the issues. Is the address correct? Is the invoice on the next cheque run? Has it been authorised? Do they have any intention of paying within 30 days? Are they having cashflow problems? Are they waiting for a payment to come in and once in will pay you? Are they happy with you?
Do you think they'll tell you any of above?

Wow what a fab idea I bet its expensive, I hear you cry.
Well no its £10 per invoice regardless of value.

 

[NPEXCWW]

Hi,

I am in the business that you are talking about. Our service is a low cost web-enabled invoice chasing service. We have clients that we have reduce debtor days from 90 to 62. We do not take a percentage of the invoice it is a set fee, which helps with budgeting.

If I can help pm me.

Hi I read your message and would like to know more!
I'm setting up a freight forwarding company in which i will only be invoicing my customer on 28 days and paying suppliers on 14 days. Therefore looking for a solution to cover the outstanding supplier invoices for a 14 day period. We hope to be trading at £2000 a wk to start with and to be able to cover our invoices for the first 12 months. Any idea of what the fixed cost would be?

 

[cpcm credit management]

Hi

I am in touch with most of the finance providers and can give a good idea of who would be a decent fit. Judging by your profile, i have a couple in mind ....

Feel free to call me on 07956 138895

Clive

 

[internetspaceships]

Invoice discounting and factoring are a bit of a nightmare.

We use Barclays for ours and even though we've looked, we can't get a better deal anywhere. (I'd challenge anyone to try)

They even re-negotiated our fee structure within the original contract due to the business growth that we achieved.

Do check on the actual definition of "non recourse" though, as some companies remove the value of a bad debt from your funds whilst they process the claim for it.

Being new to this kind of facility it will cost you a fair percentage of your invoices i.e. over 3%

If that's labour work then it's not so bad but for stock you need to keep a weather eye on the margins.

Good luck with it OP

Regards

Jon

 

[Geoff T]

Jon,

My advice on your sitrep is to look at an "exit strategy" for the discounting... you might be pleasantly surprised what happens to your net profit margin...

 

[cpcm credit management]

Hi Jon

Go on. I will take up the challenge

 

[Ian J]

I'm setting up a freight forwarding company in which i will only be invoicing my customer on 28 days and paying suppliers on 14 days. Therefore looking for a solution to cover the outstanding supplier invoices for a 14 day period. We hope to be trading at £2000 a wk to start with and to be able to cover our invoices for the first 12 months. Any idea of what the fixed cost would be?

Factoring is probably the best bet for you. At those levels it would probably cost you between 2% and 2.5% of turnover plus interest on the funds advanced at 3% pver Libor

I would think that most appropriate company for you could well be Peak Cash Flow and would suggest that you contact Peter Stanton on 0121 236 7575 for a definite quote without any obligation

 

[NPEXCWW]

I’ve been looking at getting cash back on some of my outstanding invoices. What is the difference between a bank and one of the dedicated companies (Bibby etc) who come up in Google.

Also – the invoices I have are for recruitment services – I therefore don’t have any physical products as collateral – will this still work??

Hi Rose - I had a meeting with my bank yesterday about this, They said that I wasn't able to use this system as i was replying on 3rd parties to carry out the work for me ie: The invoice i would raise to be factored would be for a company that was also waiting on payment. If you are selling a product to an end user. you invoice will be going direct to the company whom are not awaiting payment for the same work and so you would be considered. I hope this helps!!!

 

[Ian J]

I hope this helps!!!

I doubt it for two reasons. Firstly she is in a completely different industry to yourself and one that is eminently factorable and secondly she asked the question eight months ago so an answer at this late stage probably wouldn't be much help anyway

 

[BobPetcher]

I think you may have a problem with the type of business that you have. Factors, like to have a tangible product with evidence of delivery etc. I use to have a PR company and was turned down by every factoring company that I approached because I was selling a service.

However, since I set up my jewellery business, I have used three such companies: HSBC who are excellent but I understand that they will now only look at you if your are projecting £300K+ turnover; Lloyds TSB Commercial Finance are pretty good too but both of these operate hefty minimum charges so you can end up with a very expensive facility.

I currently use Bibby's small business package which works on a flat fee basis with no minimums. However, the service is crap. Phone calls don't get returned and they will postpone the release of funds against an invoice for as long as they think they can get away with it! I have been using them for three or four months and have not really felt any benefit from the service. Unlike the other two they don't even credit check customers for you.

My opinion is that factoring is only useful if you have a business that is growing so quickly that you can't forecast an overdraft requirement accurately. If you are looking at it as a way of getting hold of some quick cash, I wouldn't bother.

 

[Ian J]

I think you may have a problem with the type of business that you have. Factors, like to have a tangible product with evidence of delivery etc. I use to have a PR company and was turned down by every factoring company that I approached because I was selling a service.

Not so. I estimate that the largest sector of business for factoring companies is the recruitment sector where the debt is represented by the hire of labour.

I can't see anything wrong with a PR company per se and am guessing that a large part of your turnover would have been represented by invoices rendered in advance of the service being performed which would render it unfactorable

 

[BobPetcher]

That's probably right. It's true we were chargng for time up front and I am also talking 20 years ago so have no doubt that things have changed.

 

[cpcm credit management]

PR is seen as professional services and a lot of factoring/id providers do not like this sector. Suprising perhaps, but the (old fashioned perhaps) view is that their collections are on a par with accountancy and legal firms.

I was groupo credit manager for a£170m turnover PR group so know the industry well enough!

 

[Ian J]

PR is seen as professional services and a lot of factoring/id providers do not like this sector. Suprising perhaps, but the (old fashioned perhaps) view is that their collections are on a par with accountancy and legal firms.

As I have already said, factoring companies will be happy to look at PR companies as long as the invoices are rendered after the work is done ans no factor will get involved with a company that invoices in advance for the simple reason that if the factor's client goes bust the customer is hardly likely to pay for work that hasn't yet been done.

Factors will also offer facilities to accountancy firms and other professionals but not solicitors or barristers as giving copy invoices to third parties isn't allowed by the Law Society as that would break client solicitor confidentiality if others read the invoices

 

[cpcm credit management]

Im not sure what your point is. I said "not all" factoring companies

 

[TheivinSteven]

Factoring is expensive. Talk to your clients, build a relationship, let them see you are only a small company and really really need them to help you.
People buy people.

 

Factoring is expensive.

Compared to what?

I agree that the best option is to not offer credit, but in many markets and with many clients this is simply not an option.

The cost of factoring (like the cost of anything) is only relevant in conjunction with the benefits it brings - ie how much bottom-line revenue will the cash bring?

 

[RailyPhill]

Hi - just a small contribution to this thread..

I have of course had a number of my clients ask me to help them with their cash flow and where Factoring or Discounting has not been cost effective we have developed strategies for them to get their customers to pay them by credit card.

That way the end customers still enjoys delayed payment and you benefit from cash today.

Naturally this does not suit all but as part of a mix can help.

Regards

 

[internetspaceships]

Hi - just a small contribution to this thread..

I have of course had a number of my clients ask me to help them with their cash flow and where Factoring or Discounting has not been cost effective we have developed strategies for them to get their customers to pay them by credit card.

That way the end customers still enjoys delayed payment and you benefit from cash today.

Naturally this does not suit all but as part of a mix can help.

Regards

Please excuse my laughing here but "we have developed strategies for them to get their customers to pay by credit card."

 

[saxondale]

Please excuse my laughing here but "we have developed strategies for them to get their customers to pay by credit card."

lasts about as long as his signature hyperlink

 

[RailyPhill]

I thought this forum was about sharing ideas. Sorry

Offering your customers the ability to pay by credit card can offer some businesses a solution.

Happy to discuss your ideas

 

[manaboutmoney]

this sounds quite interesting, could suit me as once or twice a year I invoice 30K plus to an NHS trust for a bulk recuitment order. I will have a chat with a broker on this.

 

[RailyPhill]

No problem. It is a tidy little product used in the right circumstances.