Cash flow is often a problem for businesses. In this case study, we show you how Breadalbane Finance was able to use Invoice Finance to solve client’s cash flow issues.
An engineering company with a turnover in excess of £1m wanted to increase their cash flow. Their Bank was looking to remove £100k Overdraft and replace with an Invoice Discounting Facility with a Funding Limit of £200k. The client wanted to explore options rather than simply do what the bank told them to do. Breadalbane Finance was introduced by the client’s Accountant who recommended us due to our extensive Invoice Finance experience.
- Growing business but its cash flow was strangled by the Overdraft Limit together with a lack of internal focus on credit control.
- Giving too much flexibility to customers ie allowing the lethal combination of too much credit and allowing customers to take too long to pay.
- Management struggling to focus on driving the business forward due to cash pressures.
- Considering recruiting credit controller but wary of increasing staff numbers and creating additional management challenges
- Struggling to meet main supplier credit terms.
- Although the bank option would improve cash-flow it did not address the issue of inefficient credit control.
Solution: – Use Invoice Finance to improve cash flow
- Breadalbane reviewed all options and recommended a full Invoice Finance facility including credit control.
- A proper assessment was made of customers and appropriate credit limits agreed with the Invoice Finance Provider
- Although the facility was slightly more expensive than the bank offering it actually worked out more cost-effective as the business did not need to employ credit control resource.
- Cash-Flow has improved significantly due to increased funding and disciplined approach to credit control.
- Additional funds available have allowed negotiation of early payment discount with some key suppliers.
- Client able to re-focus on growing business with confidence
What the client said:
Jamie Lindsay from Breadalbane Finance really helped us to understand the different Invoice Finance facilities available and that enabled us to choose the most appropriate solution for our business. We have improved our cash-flow and tightened up our credit control processes without having to employ any additional staff