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Consistent cash flow is vital for any business. Slow payments and rapid growth can at times affect cash flow and in turn the overall running of your business. Did you know you get instant cash flow by using invoice factoring to convert your invoices into cash? In this article, we will explore how invoice factoring works along with other tips to improve your business cash flow.

How does invoice factoring work?

Cash Flow Financing PerthWith Key Factors invoice factoring, it is very easy to get instant cash flow from your invoices. Simply send us a copy of your invoice and we will send you up to 80% of the face value within 4 hours. The remaining 20% is transferred to you when your client pays us, less any accrued fees.

When you use invoice factoring, you give yourself the ability to pay your staff and business running costs, without the stress of waiting for a client to pay their invoice. Business loans from banks can be difficult and time costly to get approved. Some loans can take up to months to get approved and come with high fees, long-term contracts and often are inflexible with their terms and conditions. Factoring, on the other hand, follows the cycles of your business giving you instant cash flow when you need it.

Benefits of Key Factors invoice factoring

Key Factors has no lock-in or long-term contracts or quarterly audits. Additionally, if you are busy looking after your business, Key Factors friendly staff can also assist with the follow up on customer payments on behalf of your company.

Many business owners choose invoice factoring as it allows them to grow their business without the hassle of worrying about cash flow and following up with customers.

Review marketing strategies

Another way to improve cash flow is to review your marketing strategies. A decline in your sales could be due to a poor marketing strategy. To improve cash flow, review the conversions from your current marketing efforts and see where things could be improved.

Arrange longer payment term with your suppliers

Extending payment terms with your supplier is another great way to improve cash flow.  Perhaps reviewing whether 30 days term could be extended to 60 days or even 90 days, and asking for a payment term for those who require payments up front.

Set up Invoice Factoring

If late payments or rapid growth is affecting your business cash flow, consider setting up invoice factoring to get instant cash flow from your sales invoices.

Key Factors is transparent about our fees from the very start.  Give our easy-to-use calculator a try to see how much cash you can get from your sales invoices and how much it will cost you up front. If you have any questions about invoice factoring and how it can work for your business, just get in touch with us via our contact page or call 1300 884 100.

Apply today, to experience the benefits of instant cash flow.

Company Name: Flexi Management Solutions Ltd

Industry: Workforce Management

Annual Turnover: $10,000,000.00

Group Facility Limit: $1,000,000.00

Flexi Management Solutions Ltd founded in 1972 is an Australian company listed on the Australian Stock Exchange. Flexi Management Solutions provide workforce management solutions to leading public and private sector organisations. WhenFlexi Management Solutions approached Key Factors they had multiple subsidiaries that were operating at a loss, they had just ceased their factoring facility with another provider, and they were on the verge of being shut down by the ATO due to having tax debts in arrears in excess of $2,000,000.00.  Key Factors’ flexible factoring was just what they needed to get their business back on track.

They needed cash flow assistance in order to sell off some of their non-performing subsidiaries and clear their ATO debts, at the same time they were cautious due to the poor experience they’ve had with their previous provider. They wanted a flexible financial partner who was not going to tie them into a long-term contract, allow them to use the service on a selective basis, and only charge them for what they use. Key Factors was able to offer Flexi Management Solutions just that and at the same time improved their cash flow by releasing the cash tied up in their unpaid invoices.

Key Factors Flexible Factoring

Flexi Management Solutions simply submit invoices to Key Factors as they need cash, and up to 80% on the face value of their invoices were credited into their account in as quick as 24 hours.

Within 6 months of using Key Factors flexible factoring finance, Flexi Management Solutions cleared all their ATO debts, restructured their business and is back to being a front runner in the workforce management sector.

Key Factors flexible factoring has no long-term contracts, no property security, no minimum usage, no management fees, no annual fees, no monthly admin fees and no quarterly audits.

The scenario above is taken from a real client situation. The client’s business name and details are withheld for privacy reasons.

With over 30 years of experience and offices in Sydney, Melbourne, and Perth, your business is in safe hands.

Call 1300 884 100 today to find out more.

One of the most challenging parts of running your own business is the unpredictability. Unlike being an employee with a fixed salary, there are many moving parts that can affect your cash flow. Late-paying clients, unexpected expenses, ebbs and flow in customer demand — all of these things can make paying your bills, employees and contractors on time a constant struggle. When there’s so much uncertainty around your incoming payments from clients, it can be nearly impossible to look to the future and grow and scale your business. Thankfully, there is a way that you can make your cash flow predictable, reliable and regular again. Read on to learn how to forecast future cash flows with factor financing.

What is factor financing?

Cashflow Finance For Small Business

Factor financing is when a financial institution or funding source pays a portion of your client invoices up-front. Other names for it include invoice financing, debtor financing, invoice discounting and cash flow financing. The business sells its accounts receivables to a third party (called a factor) at a discount, in order to get access to immediate cash. It can improve your working capital by drawing funds against your unpaid invoices.

When you use Key Factors for factor financing, you invoice your client, then send it onto us. We then pay up to 80% of your funds in as little as 4 hours, with the remaining 20% minus any accrued feeds to be released when your client pays us. The cost of factor financing can vary depending on the factoring company. Usually, a flat factoring rate is applied which will determine the factoring fee. At Key Factors, we only charge a flat daily rate on what you use. There are no ongoing monthly admin fees or annual charges associated with Key Factors’ invoice factoring service

How does factor financing help forecast future cash flow?

 

Factoring is an indispensable strategic and financial resource when it comes to forecasting future cash flows. While surprises can be nice when they involve fun things like flowers, cake or puppies, this certainly isn’t the case when it comes to your finances.

For example, if you have just started working with a new customer or client, it can be difficult to know how cooperative they are with payment terms. Without using factor financing, a business could be left waiting 30, 60 or even 90 days for this client pay. This may leave them completely blindsided and leave them unable to pay outstanding debts — let alone invest in more things that are going to drive their business forward.

Key Factor Perth

On the other hand, businesses that use factor financing know exactly how much they are going to get paid and when. Having a more predictable cash flow will allow you to take on more work, hire more staff and grow your business.

Factor financing is not only pivotal for forecasting future cash flow, but also future business growth. The two are deeply intertwined, with poor cash flow being the number one reason 82% of small businesses fail. With the knowledge that they will be relying on factor financing — not the whims of clients and customers — to manage their incoming finances, business owners can make strategic decisions that are going to accelerate the growth of their business.

From this secure position, they are able to create a robust business plan that outlines a strategic plan to scale. They can decide in advance exactly when and where they will invest in tools, employees and education that are going to skyrocket their growth, rather than having to wait on cash tied up in their accounts receivable.

With Key Factors, funds can be released in as quick as 4 hours, factor financing can also allow you to quickly get on top of financial burdens, like ATO obligations. This can allow you to focus on moving your business forward, rather than focusing on past debts that need to be settled.

Is factor financing right for my business?

Cashflow Finance PerthIf customer payment terms or rapid growth is affecting your business cash flow, you may want to consider setting up factor financing to get instant cash flow from your sales invoices. At Key Factors, we service small to medium businesses from a range of industries. Whether you are a growing company requiring cash flow to service demands, a newly established company requiring working capital to expand, or you simply need to bridge the gap of slow payments, Key Factors can help.
Companies benefiting from Key Factors factor financing generally have a high level of customers on accounts for the provision of goods or services, and have an annual sales turnover ranging from $500,000 to $30 Million. Invoices relating to business-to-business transactions can be considered, not consumer receivables. We also only process invoices which are still within normal trading terms, and those that are for work fully completed, not progress claims.

Interested in learning more about how to forecast future cash flows with factor financing? Apply online, call us 1300 884 100 to find out more, or fill out an enquiry form and we will be in touch within 1 hour.