Wondering how invoice finance can boost your business? Read this blog to learn the distinct advantages of invoice finance in your industry:
Different industries have specific requirements, regulations, and processes.
So, depending on your business sector or industry, invoice finance can be a real game changer to your economic situation in terms of expansion, security and overall prosperity.
Whether you need extra assurance for your finances to ensure staff wages get paid on time or you’re looking to upgrade your equipment and machinery essential to your operations, invoice finance can give you that quick cash flow boost for a small lender’s fee, plus so much more. Let’s explore.
What are the benefits of invoice finance solutions?
Invoice finance solutions benefit numerous businesses and sectors with instant funds to improve cash flow, enabling companies to be more flexible and proactive with their money.
So, knowing speed, flexibility, and customer satisfaction are on your side, how does invoice financing benefit your business specifically?
Let’s take a look at the advantages of invoice financing for seven different industries:
- Invoice finance for manufacturers
Anyone in the manufacturing industry knows that a smooth and successful business relies heavily on a supply line. Whether you need to source materials for manufacturing or the delivery of your products to the next destination, all it takes is for one disruption to cause backlogs that can rupture client relations.
Despite our best efforts in the industry, some things will remain outside our control. The pandemic of 2020 is just one example of how things can change drastically, not to mention social-political issues that often arise around the world.
Therefore, invoice finance can benefit manufacturers who require quick cash to improve their operations or arrange alternative supply and delivery methods. Perhaps your manufacturing business is ready to expand or you’d prefer some extra financial security to cover costs.
Regardless of your needs, invoice finance can help you expand and stay on top of your costs, keeping your profit margins healthy and staff and customers happy.
Invoice finance can also allow manufacturing businesses the opportunity to get discount from their suppliers. Many suppliers can offer discounts if they get paid sooner. Releasing cash from sales invoices can increase working capital to pay such suppliers quicker. The discount itself could sometimes cover the cost of the invoice finance facility.
- Invoice finance for wholesalers
Investing in stock to expand wholesale is becoming increasingly important to ensure your warehouse keeps up with the market. But at what cost?
Freeing up your cash flow through invoice finance can ensure you cover the costs of upgrading your warehouse alongside maintenance and repair, without causing any downtime or stocking issues.
Releasing cash from unpaid sales invoices can allow a wholesale business the chance to release more cash into the business and keep a good control of stock and speed up the trade cycle and grow.
- Invoice finance for construction companies
Speed and quality are crucial to the construction industry.
But like many trade industries, human error undoubtedly becomes a factor. Plus, external elements like the weather are often required to contend with when meeting deadlines.
Sometimes we need to source materials or machinery fast to keep up with the main contractor’s expectations, alongside plugging any financial gaps in case things don’t quite go to plan.
Contrary to popular belief, late payment issues are not always the fault of the builders. Late payments appear to be an industry-wide problem, with many subcontractors causing issues.
Invoice finance gives construction companies funds fast, providing money required upfront before jobs start and minimising project delays.
- Invoice finance for the engineering industry
Delayed payments negatively impact all business sectors, including the engineering industry.
With numerous overheads to consider, such as staff wages, supplies, and energy costs for your facility alongside the maintenance and improvement of high-tech machinery, equipment and software, engineering involves significant amounts of funding to keep everything running as it should.
Therefore, it can take just one delayed payment to impact your engineering process, which can then cause further ramifications down the line. Invoice finance can give you the upper hand by sending you 85-90% of your unpaid invoice in just a matter of hours. You can also release the cash tied up in your existing sales ledger as long as the existing invoices are no more than 90 days old.
- Invoice finance for the transport industry
Transport and haulage play an integral role in business and wider society. Whether it’s delivering goods on time or transporting passengers safely to a destination – reliability, speed, and safety are crucial.
But unfortunately, transport rarely comes with a 100% guarantee. Engines break down, traffic jams merge, and signalling problems can hold back operations. The repercussions of these transport issues create delays and can cause customers or passengers to demand refunds.
Cashflow is crucial in such a cash-hungry sector as business owners need money to keep the vehicles fuelled and on the road. It also often takes debtors 30-60 days to get paid by clients, which is a long time to wait for your cash. Invoice finance can release this burden and give you the assurance that you can keep your vehicles on the road and grow the business.
Despite the uncertainty associated with transport, at least you can gain more control to act quickly if things go wrong with invoice finance solutions. Whether that means getting another vehicle on the road or maintenance on your existing vehicle fleet, invoice financing gives you the cash flow to invest in more transport and expand your operations.
- Invoice finance for the printing industry
In the wake of digitalisation, many print companies are having to enhance their processes, materials, and machinery to keep up with the times.
According to Print Week, late payment issues have remained a problem since the pandemic. In their survey, it was unveiled by 37% of their respondents that “Late payments are prohibiting growth.”
Due to the financial strain, printers wish to not damage client relations and accept long-term payments. But it’s not an ideal situation in what is already an increasingly challenging and competitive industry.
So, whether you’re looking to introduce more sustainable practices, materials and inks into your printing and publishing, or you need to upgrade your operations with new and expensive equipment, invoice financing can help you make moves fast while covering the costs for large print runs, tax demands and any late payments.
- Invoice finance for design and marketing agencies
Most marketing and design agencies rely on monthly or quarterly payments from their clients. As we know, some clients need a little nudge to pay their fees on time, while staff need time to learn and develop to improve the quality of their output so you can charge more in the future.
One way or another, the business is competitive and unstable. Work can stop at the drop of a hat while wages, rent and outgoings remain constant.
Invoice financing is flexible to suit the versatility and erratic nature of the marketing and design industry. And the best part of all is that you don’t need to sign any long-term contract.
Speak to an invoice finance specialist
At Contact Business Finance, we’re a trusted commercial finance brokerage supporting businesses across the UK. All our clients receive free, impartial advice from invoice finance specialists with extensive market experience across multiple industries and lenders.
Get in touch with Contact Business Finance today to learn more about the benefits of invoice finance solutions for your business.