“By withholding payments the large companies are affecting cash flows and restricting small businesses from thriving.”
“Large companies 'killing' small businesses by withholding payments.”
“You hear of some businesses waiting 60, 90, 120 days or more to get paid for work done. It's not good enough. Everyone in our economy benefits if cash moves around faster.”
You have probably seen some of these headlines over recent times explaining how large companies are affecting the cash flow of small NZ businesses by withholding payments. Fonterra, the most high profile name involved, changed its payment terms for contractors and suppliers last year, so that now it can take a small business between 60 and 90 days to get paid.
Changing the mindset of these large businesses will not occur overnight.
Fortunately because of CFF’s debtor funding facilities SME’s do have the option to convert their unpaid invoices into cash and offset the working capital ‘strangulation’.
CFF provide multiple funding facilities including full service factoring, whereby invoices are assigned to us and we automatically fund to the greatest level possible; up to 80% of the value of your invoices straight away with the residual, less our fees, after the customer has paid.
The cost of debtor management is included in our fee. We work with you to manage your customers. We perform tasks such as sending the monthly statements, receipting your customers’ payments, reconciling the accounts, following up any customer queries and following up those whose payments are late. If you wish, provide us access to your Xero account and we'll make your life even easier.
Factoring is not expensive because the cost of funding is often more favourable than an overdraft and our administration costs are generally offset by the time savings made by the outsourcing of your debtor management and then better deployment of your staff elsewhere.
We respect your customers and the relationship you have with them. In fact, we prefer to have minimal contact with them although we do send out receipts, monthly statements and follow up on overdue accounts in a polite, professional but persistent manner.
- - because our funding solutions provide cash flow for growing businesses as well as those who are faced with the occasional “bump” in trading activity; and
- - because we typically make more funds available than a bank will via an overdraft.
Unlike many of the large corporate players CFF is not heavy handed with clients. We recognise flexibility is important. For example we offer facilities that enable clients to discount single invoices on a casual basis. There are no long-term contracts that lock you in for an extended time period. In short we aim to match our service to your business needs.
Although pressure is mounting on large companies to make life easier for small businesses, often considered the “lifeblood of our economy”, the fact remains that one in six invoices payable by NZX 50 companies to small businesses is overdue by more than 30 days. CFF can’t change the trading terms of your customers but we can improve your cash flow and internal efficiencies by effectively turning credit sales into cash sales and helping to solve the slow paying debtor problem!