Invoice finance is a quick and easy way for small and medium businesses (SMEs) to overcome their cash flow challenges. But while the invoice market in Australia is growing, many businesses still wonder ‘should I sell my unpaid invoice?’. Today, I want to help you answer that question.
What is an invoice?
First, let’s start with the basics. An invoice is a document you provide to a customer or client that details the products and/services you have provided to them (or will provide to them) along with the price of those products/services and the total amount the customer/client (now your debtor) owes you.
An invoice may be issued in a hard copy or digital form (you can send them via email) and it may be payable immediately or it may come with credit terms. Credit terms enable debtors to manage their budgets by allowing them to pay at some point in the future, be it 14, 30, 60, 90 or even 120 days in the future.
Credit terms create cash flow challenges for SMEs
While credit terms can encourage prospects to make their first purchase from you and existing clients/customers to make repeat purchases, the ability of a debtor to pay their outstanding invoice at a later date means you have to wait weeks or even months for incoming payments. The resulting fluctuating waiting periods and uncertainty about when you’ll be paid can create cash flow challenges and elicit anxiety.
So, what can you do if your bills are due but your invoices haven’t been paid? Simple, sell your invoices for a quick and easy cash flow solution.
Selling invoices gives you a quick and easy cash flow solution
When you sell an outstanding invoice to a third party, they take on the risk associated with the credit you’ve issued. At the same time, you get access to the money you need to pay for your expenses. The fee charged is a small price to pay to alleviate your anxiety. Selling invoices to banks and traditional factoring companies in today’s environment can be challenging. But alternative finance providers like the invoice discounting company InvoiceInterchange offer quick and easy invoice trading with no lock-in contracts and fully transparent fees.
Should you sell your invoice?
Alternative finance, like many new services, has some stigma attached to it because it’s a different way of doing things. But the alternative finance scene in Australia is strong and still growing. Invoice finance is a useful solution for many businesses from Sydney to Melbourne to Brisbane and everywhere in between so get in touch with us now to discuss whether it’s right for you.