19 October 2016 13:00
Cashflow crisis averted: My eureka moment
In the fast moving world of business, it’s easy to let your finances slip every now and again - more so in a small business. That's why discovering a new way to balance the gap between finishing a job and receiving payment has made such a difference.
We’ve all been there, giving clients 14 days and they pay in 30, giving clients 30 days and they pay in 60! It shouldn’t be that difficult, so why is it?
Last year (2015) we were cutting it a bit too close to the wire. One client had about £10k outstanding for 6 months. I tried everything, incentives for early payment, threatening to apply interest per day it remained outstanding etc etc. Some might argue I was too lenient, but it's difficult to turn down work from high-prolfile clients - even if they owe you money! And, they had raised a purchase order for the job, so It didn't feel too risky. Anyway, we got paid in the end, and have continued getting work from them and it’s now safely in the history books.
I vowed never to let our growing company get into that situation again and decided to take preventative measures. We started applying discounts on payments made within a set period of time after the invoice has been raised. That helped in some cases, but I wanted to find a longer-term solution to bridging the gap between work and payment. That's how I stumbled across the concept of Invoice Finance.
URICA differs by paying the cash to you immediately, without you taking on any debt or liabilities. They take the risk and only charge a small percentage of each invoice and that’s it. No additional fees, no knocks on the door to repay, no telephone hassling clients or yourself to recover monies. It’s great!
We use it for almost every invoice we produce as a business, you can pick and choose which you want to put on their system without being charged for not using them. Fees per invoice range depending on the amount billed and credit term you offer to your clients. Typically, we pay around 1.5% of the invoicable amount to use the service. That’s a fee I’d happily pay time and time again to get paid the same day you raise an invoice. No waiting 30 days, no hassling clients when they’re late. No, you get paid there and then and can go about your daily business with your cashflow set free.
Why not give URICA a call or email to discuss how they can smooth your cashflow issues now. They even have a handy calculator to see exactly how much you’ll pay on an invoice amount. I should say that I'm not connected to URICA in any way - I just wanted to share this doscovery with other business who will have no doubt found themselves in a similar situation. I hope it helps! Make sure you say hi from the Chimpsta team, they love knowing we’re spreading the good word!