Getting delayed invoice payments
Your invoice goes out but 30, 60, 90 days pass and there is still no money in your account.
You chase, they stall. Meanwhile as you wait to get paid, your business is footing the bill, but your bank account can’t afford all the money going out.
As each day passes, staff wages, supplier payments, overheads, tax obligations and missed opportunities are all taking a toll. On top of all that, the money you’re not getting paid, is sitting in someone else’s bank account earning interest!
Delayed invoice payments is a silent cash drain
You’re not losing the invoice amount — you’re losing what that cash could’ve done for your business today:
- Funded a new hire
- Secured stock before a seasonal rush
- Paid your BAS on time (and avoided penalties)
- Taken on another client
- Paid for staff and materials
When you're running lean and waiting months to get paid, even small delays create big ripple effects. Ripple effects, that can cause businesses to go broke!
One of your biggest assets as a business is your debtor book and the cash receivables that are owed to you. Something a lot of business owners don’t know, is that they can use their debtor book to get business financing (more below).
The bigger the client, the slower the payment
The irony with all of this, is that when you do finally land that major account — the kind that could transform your revenue and life. Those clients typically run on bureaucracy with 60–90 day payment cycles not being out of the norm. You deliver the work, but the cash? It might not show up this quarter.
Now what? You’re stuck financing someone else’s balance sheet while juggling your own.
Your debtor book is one of your largest assets
Your debtor book / invoices owed to you can be used as form of security for you to take a loan against.
Debtor financing or invoice financing uses your debtor’s ledger book as security to advance you funds so your business isn’t slowed down by debtors that take too long to pay.
Imagine having 80% to 90% of your invoice amounts paid to you upfront, and not having to wait for payment? What could your business achieve?
Debtor financing terms
Instead of chasing invoices or absorbing the fallout of delayed payments, smart businesses are using debtor financing / invoice financing to stay ahead.
- Access up to 90% of your invoice value upfront
- Funds within 24 hours of invoice being issued
- Discreet and fast.
- No property security required.
- Get access to invoice financing when the banks say no!
Debtor financing pays for itself if you manage it right
Invoice financing / debtor financing pays for itself in most cases if you manage your cashflows right. Picture this, you issue your invoice that your client will pay you in 90 days. Within 24 hours of your invoice being issued you have 90% of the invoice amount in your bank account! What now?
You can pay suppliers on time or earlier to get discounts.
You can pay sub-contractors on time or earlier to get discounts.
You have working capital to take on a new job and make more profit from that job.
You no longer need to pay penalty interest on loans that you took because you couldn’t make payment.
All these benefits, out weight the costs of invoice financing / debtor financing.
To read more about invoice financing click here.
For a confidential discussion, contact us here.
