Time to get back to business
Months of uncertainty over who is going to lead the country after the General Election are over.
The after-effects of the recession and the political vacuum have meant many businesses have literally been living on borrowed time as they struggled to keep afloat in the economic climate.
The new Government has to act quickly to avoid a stream of businesses finally beating a path to the bankruptcy courts.
Since the recession kicked in, the banks have pulled down the shutters on borrowing and with orders declining, company owners have been forced to use their own cash while working harder and longer to stay afloat.
Research by insurer Hiscox found business owners were forced to raid a total of £16bn from their own personal savings to prop up their businesses in the last year, with one in five investing £17,030 on average.
At the same time many company bosses have been slashing their own salaries in a bid to save cash and ten per cent have been working more than 50 hours a week just to survive.
Meanwhile, the number of invoices being left unpaid has soared, with recent figures showing invoices for £15.7bn are more than 120 days in arrears.
But there are alternatives which can help smooth the financial impact and ensure cash keeps flowing into your clients’ businesses.
Invoice finance comprises factoring and invoice discounting and is an ideal solution as it frees up money that is owed to a business in unpaid invoices.
Factoring offers a flexible way of improving your clients’ cash flow as it releases money tied up in outstanding invoices and takes away the time-consuming task of chasing and collecting payments.
Invoice discounting is a funding-only solution. Your clients retain their own sales ledger management and continue collection of unpaid invoices. Finance is raised from the unpaid invoices owed to them.
Either of these solutions could mean less strain on personal bank accounts.
With an immediate income stream that grows in line with sales, business owners can concentrate on winning new orders instead of chasing invoices.
And more money in the business means additional security for the company and its employees.
Andrew Bullard, Head of Business at Cashflow UK, said: “Once a company owner has used their own personal cash to prop up their business, it will be almost impossible to recoup it in the short-term.
“It is far better to make use of a service that allows them to keep their hard-earned savings in the bank while allowing the company to carry on its business on a more even keel without worrying about large debts and outstanding invoices."
