Funding is an ever-present pressure in business. For an industry like transport and haulage, cashflow finance can be a huge problem. Clients don’t always make timely payments. In fact, they often expect to be able to delay payments. That’s why more and more haulage companies are looking for cashflow finance solutions.
Flexible invoice discounting is a facility that more and more companies are using to help balance the needs of their clients as well as the needs of their business.
The Problem of Traditional Funding In A Changing Field
Transport and Haulage might be an industry that has been around for as long as the economy. However, it is currently going through many changes, with more on the horizon. The growth in online shopping means that the way goods are being moved between suppliers and end-users has changed. It is driving the need for larger and more diverse fleets.
Many growing SMEs are looking for innovative new solutions. Electric vehicles are the current technology that is driving change, and we’re not that far away from driverless technology. Both of which are having a considerable impact on transport and haulage industries. With so much in flux, flexibility is the best asset a company can have. To have the flexibility you need to have easy access to cash.
There are two traditional ways to get an injection of cash. The first is to take out a loan. This can be costly and difficult if you already have one. So, it’s not the first choice or even a choice at all for some companies. Your next option is to call in all your unpaid invoices. Badgering customers to pay, or asking to pay sooner than they would like can cause friction which can cost your business.
However, without the injection of cash at the right time, you can fall behind and then you lose more clients. Flexible Invoice Discounting is a newer middle of the road option; it can provide you with the ability to control your cash flow, without the high costs and restrictions of getting a loan.
What Is Flexible Invoice Discounting?
Flexible invoice discounting is a finance solution that allows you to get paid for the work you have done more quickly. Typically, when you complete a delivery, you invoice the client. Then, you have to wait for them to pay you with their long payment terms. With flexible invoice discounting you can get most of the money out as soon as you have issued the invoice, thanks to the lender in place.
Why Flexible Invoice Discounting Is a Good Fit
You pay for the service by giving a small fee to the finance provider out of the debtor’s payment. You know exactly how much you are paying each time and it comes out of your incoming money, so there is no upfront cost. Because it is flexible, you can choose to use it against your entire sales ledger or perhaps a selected group of debtors. It may even be the case that you only require the solution for one debtor. You can use it to manage your cash flow so you are in total control.
Another benefit is that it is one less thing to worry about. You will issue your invoices through the finance company’s system, so you don’t have to manage, chase and monitor payment of invoices. Once you are set up and running, it is straightforward, and it leaves you in the driver’s seat.