Updated: 14th April 2020
My company distributes foods (dry goods) to restaurants and pubs throughout Wales and the South West of England. Until quite recently our customers were paying their invoices on time and we had no problems. Unfortunately, it seems as though many of them are falling farther and farther behind in payments. Now they are paying quite late, if at all. We are reluctant to stop supplying goods to them because this would literally put them out of business. However, we can’t afford to hold off any longer as we are now falling behind on our bills as well. How do I get paid on invoices quicker to help my cash flow? If it continues like this, we may go out of business ourselves!
When customers pay late or are not paying at all, it seems as though you have only two options. The first, as you have mentioned is not going to be comfortable for you or your customer. You can choose not to make any more deliveries until they have caught up. As you say, this may very well put them out of business. On the other hand, if you would like to get your money quickly, the very best solution would be to consider invoice factoring or invoice discounting. In either case, it would be quite like taking out a loan with your book debts being the security.
Whilst invoice discounting would be a loan against your book debts, you would still be left with the task of trying to collect what is owed to you. Invoice factoring, on the other hand, places the onus on the factoring company to collect the money for you and you can continue running your business as before. Perhaps the quickest way to get your invoices paid would be factoring because this shows your customers you mean business. Real Business Rescue can help put you in touch with invoice factoring or discount lenders. We would be happy to consult with you to see if this is, indeed, the best option and bear in mind that the initial consultation is free and there are no obligations involved.
19th January 2021
Big companies in the UK are being told by the government to pay their suppliers within 30 days of receiving their invoices.Read More
13th January 2021
Retailers in the UK endured what was statistically their worst year on record in terms of sales growth during 2020.Read More