With cash flow so fundamental to the success of any business, it’s important to be proactive in protecting cash flow rather than reactive once cash flow issues occur.
One of the most common causes of cash flow challenges is trading on credit terms. By providing goods and services on credit, cash can quickly become tied up by the need to pay suppliers and meet day-to-day commitments, such as staff wages and mortgage payments, before you are paid by customers. This problem can then be exacerbated further when customers miss payment due dates, which is so common in today’s marketplace.
While debtor protection or credit insurance safeguards businesses against the issue of customer non-payment, specialist finance facilities exist which release funding against invoices to overcome the cash flow gap associated with trading on credit. Some facilities can even incorporate both.
At Hilton-Baird, we can help your business to protect its cash flow by matching your business’s requirements with the most suitable facilities, affording you the level of cash flow protection you desire.
Credit insurance protects businesses against the threat of bad debt, whether through debtor insolvency or protracted default. In the event a customer doesn’t pay your invoice, the facility will provide a shield of cover and ensure that you get paid for any goods or services you have supplied in line with designated credit limits.
Invoice finance releases cash that’s tied up in unpaid invoices within 24 hours of their issue to specifically improve cash flow. Up to 90% of their value will be made available to overcome the cash flow gap between providing a service and getting paid, enabling you to pay suppliers and meet day-to-day commitments before you receive payment from your customers.
There is a range of debt collection services to help businesses get paid faster by customers and minimise the risk of late payment and bad debt. While outsourcing your credit control can improve collection times and give you back the time to focus on growth, debt collection agencies can also recover outstanding invoices from slow paying customers or non-payers.