Invoice Discounting Means Electrician Pay Day is a Breeze
Can an electrician pay himself whilst waiting for his customers to pay, if his bank says 'no'? He can if he's using invoice discounting - a simplified version of factoring.
A Wanganui electrician was referred to me by his bank. He did not have great systems in place for invoicing out his work or for collecting payments. He had some work from several months previous which hadn't even been invoiced. Needless to say, his cash-flow and working capital situation was not good. Then, when he got to the limits of his bank facilities, he had a problem.
We won't purchase overdue debt or invoices which are for work that is so old the cutomers might be reluctant to pay in a timely manner. We were, however, able to help this client by adjusting our invoice discounting system. He was able to invoice out his latest work through us. We advanced him 80% of the face value up front. This solved his immediate cash-flow and working capital problems.
He has also found that using our system has encouraged him to become more systematic with his office procedures. In due course he will get on top of his cash flow and be able to wean his business off our invoice discounting facility.
If you'd like to organise your own
electrician pay day
drop us a line. We'd love to hear from you.
Return to Case Studies