Since the advent of commerce, businesses have been adopting the buy-now and pay-later approach for their customers. With that, it allows flexibility for customers to pay later by instalments over a fixed period or a lump sum at the end of an agreed period. This approach has been a norm for most business transactions even up to this modern era. Thus, businesses are issuing sales invoices to their customers in 30-day, 60-day, or 90-day terms.

“Money now is more valuable than the same amount of money in the future.” This concept may be a major reason why people or companies want to collect payments as soon as possible and pay as late as possible. However, this might not be conducive to the small medium businesses. In fact, being paid after the goods or services had been delivered will require the business to closely monitor their operating cash flow. It affects small medium businesses more acutely because of their difficulty to obtain loans when their cashflow is negative.

Should you sell your invoice?

As a business owner, you have surely done your best in generating revenue through more sales of products or services. As your business is growing, your operating cash flow will need to keep up with the increase cost of goods. This is because with termed sales, your customers are paying you later in the future. Essentially, the more you sell your invoices, the higher are your debtors. Your working capital will continuously be reduced and eventually, your working capital will be squeezed and may not be able to support the purchase of raw materials or pay overheads and employee salaries. Such a situation is very detrimental to a business and can lead to bankruptcy.

Why sell your invoice? It’s every business owner dilemma! Working very hard to increase sales but causing the business to suffer from cash flow issues. However there is now a solution specially tailored for SMEs.

Don’t let your invoice stay idle. Make your invoice work for you! Sell your invoice to get finance. With invoice financing, SMEs will be able to improve their cash flow. By selling its invoices to a third-party factoring company like InvoiceInterchange, you will be able to obtain funding within 24 hours, by just paying a small fixed fee. InvoiceInterchange has an online community of ready investors and when your invoices are listed on its platform, its investors will bid for the invoices like as in an auction. The invoice will be sold to the investors offering the lowest cost to you. Once you sell your invoice, you will receive your cash within 24 hours. With that, your cash flow problems can be resolved and financing your operations will never be simpler again.

Sell Your Invoice – What kinds should you sell?

To be offered the best pricing for your invoice, you need to sell quality invoices. When you sell your invoice, we look at a few qualities as shown below when accessing your invoice.

Your customer. The creditworthiness of your customer, or the debtor of the invoice that you are selling will play a decisive role. It determines the likeliness your customer will default or delay payment. The better the creditworthiness of your customer and higher the likelihood they will pay on time, the better the pricing model will be offered for your invoice.

Historic record with your customer. A longer customer relationship of your business with the debtor goes to show that there is a strong working partnership. It takes more than just selling satisfying products or services to build on that relationship. Therefore, if you have long and good customer relationship, you will get a better rate for your invoice. Hence, you will be able to sell your invoice easily.

Diversification of sales. If your company has a wide range of customers from varying fields of industry it would be a plus point. This implies there will be less volatility, as the risks are diversified and spread out across a good range of debtors in different industries. If you have more diversified customers, you will be offered a better rate for your invoice.

Hesitate no more! Say goodbye to cash flow headaches and grab the opportunity to grow your business with InvoiceInterchange today!