Skip to main content

HOW TO DEAL WITH LATE INVOICES?

 


Late invoices are a common pet peeve for small business owners. Many small and medium enterprises provide goods and services on credit. However, due to various reasons, their customers are not always timely when it comes to clearing these invoices. Late invoices can cause cash flow issues for firms, making it difficult for them to pay for crucial business expenses. Delayed customer payments can also give rise to administrative hassles as the business owner must spend time and resources to chase those payments. If you are a business owner struggling with this problem, invoice finance may be the perfect solution for you! Let’s understand what it means and how you can use it to deal with delayed payments.

 

Navigating Late Payments From Customers: What Should You Do?

A delay in payment from a large account can cause significant cash flow problems for your business. You can try the following solutions to recoup your money and safeguard your firm:

●      Establish an accounts receivables automation system for managing overdue invoices. This mechanism will help you track delayed payments and automate follow-ups or reminders.

●      Communicate effectively with your clients to build a regular payment cycle. Building a rapport with key client groups can go a long way in easing your cash flow problems.

●      Try an invoice financing solution to unlock a cash infusion when your customers fail to pay. Some invoice financing solutions may even help you get rid of the hassles of chasing payments from clients.

 

What is Invoice Finance and How Can It Help?

Invoice finance represents a credit facility where businesses can borrow money against uncleared invoices. Once a business raises an invoice for goods or services delivered to customers, it can use invoice financing to access funds. This popular financing instrument allows business owners to deal with the issue of late invoices and delayed payments.

In invoice financing, a lender approves a monetary limit for the borrower against their unpaid invoices. As a result, the firm may be able to access up to 95% of the value of these late invoices. Once the firm's customers pay for these invoices, the lender can recoup the money they lent. The business pays interest on the amount they withdraw under the approved limit.

 

Types of Invoice Financing

Invoice financing, also known as receivables financing, has two broad categories. Let’s break down these two types:

●      Invoice Discounting: Invoice discounting is a solution where you can put up your outstanding invoices as collateral for taking a business loan. The lender approves up to 95% of the invoice amount as a loan. You must pay interest on any amount that you borrow. At the same time, the rights and responsibilities of collecting these invoices remain with you.

●      Invoice Factoring: Invoice factoring is a creative financing solution that helps you manage delayed invoices. This facility allows you to sell your accounts receivables to a financing company. They approve a business loan of up to 90% of the invoice amount. The lender factors the invoice at a discounted value. At the same time, they take charge of chasing these invoices. As a result, you no longer have to bear the hassles of chasing these payments. You can pass the collection risk to the lender and use the loan amount to grow your business.

 

If these options sound interesting, you can contact the Broc Finance team to find out more. Talk to them about your invoice financing needs to determine an optimal solution today! 

Source: https://www.brocfinance.com.au/blog/how-to-deal-with-late-invoices/

 

 


Labels:
Location: Australia

Comments

Post a Comment

Popular posts from this blog

Why Choose Commercial Finance Brokers Instead of Directly Going to the Lender

  Every business strive to grow and need finance from time to time for capex or working capital purpose. For this, they require financing options. The conventional way would be to go to a bank or any other traditional financing institution. But there is a drawback! Traditional financing has stringent assessment criteria and requirements which may all the businesses may not be eligible, especially small businesses.   Owing to this, business owners are now exploring alternatives for securing the finances needed to help their businesses prosper. This is where commercial financial brokers come into play. A commercial finance broker has access to multiple bank and private lenders offering a suite of business loan options to get the right solution for your business. Here we present three reasons why choosing a commercial finance broker is beneficial for you rather than directly going to the lender.   1. The perfect match - In the world of finance, there is no “one fit suit...
Post a Comment
Read more

UNDERSTANDING THE INTRICACIES OF BAD CREDIT BUSINESS LOANS FOR ENTREPRENEURS

  Business financing is a challenging domain to navigate. Your eligibility for loans depends on many factors and business owners have to meet complex requirements to get financing for their firms. One of the top concerns while looking for business loans is the entrepreneur's credit score. If you or your business have a history of defaulting on loans, you may find it hard to get a lender. If this happens, bad credit business loans can come to your rescue. An experienced finance broker can help you get these loans on terms that suit your needs. Let’s break down the concept of bad credit loans!   Bad Credit Business Loans: What Are They? Business owners need cash to keep their firms running. However, many entrepreneurs struggle to secure loans because of poor credit scores. That is where bad credit loans come in. These loans can help you infuse cash into your business operations on short notice. These are short-term financing sources that help businesses stay afloat in tim...
Post a Comment
Read more

When Can a Person Apply for Low Doc Business Loans & What are the Benefits?

  Documentation is one of the crucial aspects of loan approval. People unable to provide the necessary documents can get a rejection on their loan applications. But that’s the traditional way. If you approach financing options through a finance broker, even with minimal documentation you can access easy financing solutions.  Low doc business loans  are very much a reality; maybe not in traditional banking, but you can acquire funding through a finance broker from a private lender.   Understanding Low Doc Business Loans From sole traders and proprietors to SMEs, anyone can apply for low doc loans. If you are a business owner in urgent need for financing, you can apply for it, especially if you have existing documentation constraints. When you are busy expanding your venture it can be hard to keep track of all the financials. For new businesses, it is even stricter since they have not been trading for long. In these circumstances when you are in a tight spot du...
Post a Comment
Read more