Haulage and Delivery Cash Flow Update
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Success: A long haul or a short cut?
Filr the haulage and delivery ndustry, the signals are still at green. Its convenience and value for money means the sector's still growing, despite new competition. But there are more obstacles than ever that might block your road. Average journey lengths continue to increase. So do fuel costs. So does competition. So does price pressure from your customers. To get your business where you want it to go requires a constant top-up of financial fuel.
Which way do you turn?,,
So where do you turn for help? The banks? Even as the economy begins to look healthier, overdraft facilities can still be very restricted and the risks attached can cause a lot of sleepless nights.
—.there's only one direction.
More and more enterprises in the UK and abroad have found a fast, simple and effective solution. Its called invoice finance. It works on a very simple principle, yet offers a range of very sophisticated services that can be tailored precisely to your individual needs. And it's winning the approval and respect of the accountancy profession and of business leaders and thinkers.
This brief guide is brought to you by International Factors, the UK's largest and longest established invoice financier. It'll explain exactly how invoice finance has worked for other haulage businesses and how it could work for yours.
Simple financial fuel or a complete service.
No doubt you already understand the basic principle of one variant of invoice finance which is called factoring. It's ingeniously simple. When you issue an invoice to your customer, you send a copy to your invoice financier.
They then advance you funds, based on the security of the invoice. At International Factors for instance, you're paid up to 85% of the value of the invoice — and you're paid fast. You'll never wait for 90 days, not for 60, not even for the usual 30 — you'll wait for only 2 working days after the sale. You get the remainder of our money when your customer pays — less a small commission.
But you might not be aware just how much more international Factors can do for your business. At your request, their factoring service can administer your sales ledger, organise the collection of your customers' payments and can arrange an optional 100% bad debt protection. But they also have other types of invoice finance that can simply be a source of funding without any of your customers being aware of their involvement. You can use International Factors as much or as little as you want. Case History 1. MacBurnie Transport.
This Oxford based international haulier had built up an excellent reputation and a loyal customer base. They were ripe for expansion but were held back by lack of funding.
Invoice finance provided the ideal solution — the funding grows in line with sales so that as the business increases, so does the cash flow. And bad debt protection was an important bonus. After only 3 months with International Factors, they're now able to expand their European route network and have 8 new rigs ready to service the extra business. Says Dougal MacBurnie, 'Invoice finance gives us the confidence to plan ahead. And having credit cover on our customers gives us security too.'
Case History 2. Speed Couriers.
During 1995, this Leicester haulier scored a remarkable 20% growth rate — from both new and existing business. They now boast a turnover of E6 million, 23 outlets nationwide and a staff of around 250 couriers. But when Martin Rutty and Tim Gilbert started Speed in 1981 they were simply a home-based delivery service and did all the admin themselves. A vital component of their success has been flexible finance provided by International Factors. It allowed Martin and Tim to concentrate on building the business, confident that the funding they needed to do it would come through their sales. Long worrying days waiting for payment are long gone, since International Factors pays up to 80% of the invoices inside 48 hours.
The big wheels back mvoice finance.
Invoice finance has been growing 8 times faster than other forms of banking finance.
Many leaders in the business world now support invoice finance as a viable means for companies to improve their cash flow Among these prestigious voices are Sir John Harvey Jones, Eddie George, the Governor of the Bank of England and nearly 50% of the accountancy profession. At the present time, their lead has been followed by no less than 10% of small and medium-sized British businesses.
You're always in the driving seat.
When you employ International Factors, it doesn't mean you're handing over control of your finances or your way of doing business. They never forget you're the boss — and it's entirely up to you which of their wide spectrum of invoice finance services you want to choose.
It's never a package deal, always an individual programme carefully tailored to the specific needs, challenges and style of your company and the kind of business in which you're involved. Above and beyond providing finance, you've got the option of these complementary 100% Bad Debt Protection.
Even more damaging than the slow-payer is the non-payer. International Factors have expert knowledge of the credit worthiness of thousands of businesses and can provide you with 100% debt protection. Usually costing less than a separate credit insurance, usually covering you better. Most of their clients want it, hut if you don't, you don't have to pay for it Payment Collection.
Naturally this is a service which often requires great delicacy and tact. You don't want the customer's payment coming in through the door, but the customer going out through the window. International Factors' collections staff are highly trained and expert at speeding up your debt turn without offending even your most sensitive customer. It's proved by the fact that International Factors' customers are paid, on average, within 58 days compared to over 80 days for UK businesses as a whole.
Export Assistance.
These days for some British transport companies, Europe is your oyster. Unfortunately you won't always be doing business with pearls. Currency fluctuations, complex legalities, credit-check difficulties and language barriers can all be serious obstacles to what your company could achieve. As the UK's largest export invoice financier, International Factors has the expertise to deal with all these potential problems before they arise, and help the growth of pan-European road hauliers.