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• 21 May

  Accounts Receivable Funding

  The frustration of looking at a large sales ledger of unpaid invoices for sales, whilst having an empty bank account, can be debilitating. Not to mention the problems it causes in paying your creditors, suppliers and staff.

  Funding A Large Sale

  When you first make a large sale, the feeling is exhilaration at having closed a deal. However, there can often be significant delays between making a sale, delivering the goods or services and getting paid by your customer, or customers. This funding gap is made worse by the fact that companies often have to pay for either the raw materials for job, and/or the staff and labour costs to complete the work, upfront. Even once the invoice has been raised, assuming say standard 30 day terms, it can be 60 days plus before you actually receive any money from your customer. In some cases it can be even longer as taking extended credit terms is not uncommon in the UK, particularly in some sectors such as construction.

  Accounts Receivable Funding Services

  Accounts receivable funding is a simple way of bridging that gap between making the sale and getting the cash into your account.

  Using such a service, the majority of the value of your invoice is released immediately, by the accounts receivable funding company, and that means that you get the working capital immediately into your bank account. The balance of the value of the sale is passed to you once your customer has paid, minus a charge for using the service.

  This type of funding can be accessed against outstanding invoices, even though they may not yet be due, and existing invoices that have already fallen due.

  It means that you can break the cycle between constantly staring at a ledger of unpaid debts whilst having an empty bank account. Using this kind of service, your trade receivables are immediately turned into liquid cash.

  For more information please call Sean on 03330 113622 to discuss how you could generate cash for your business using an accounts receivable funding service.

  By Glenn Blackman