Tips on Finance
Tips on Finance is provided by Alex Brown from Barclays Commercial Bank.
Turn Your Upaid Invoices Into Cash
When your sales ledger paints a rosy picture but your cashflow doesn't, it could be that you need an injection of working capital to keep things ticking over. For many businesses, having to wait 30 days before invoices are settled can limit cashflow and have a knock-on effect on your ability to pay suppliers, staff and even grow the company.Options for Financing Your Business
Factoring can help by advancing up to 85% of unpaid invoices within 24 hours of them being raised and the balance is then credited when the debtor settles the account. Your bank can even chase up amounts due - freeing your valuable management time.
Invoice discounting is similar to factoring and enables you to release funds that are tied up in your sales ledger but the business retains control of its sales ledger and collections so customers are unaware of the bank's involvement. It is best suited to companies with forecast credit sales of at least a million pounds a year, have a spread of debtors and be selling goods or services on normal credit terms with no stage payments or contractual sales.
Both options help you to cut administration costs and help to protect your business against the risk of bad debt.
For more information contact Alex Brown at alexander.brown@barclays.com or phone +44 (0)141 207 3065.
