How Invoice Finance can help companies that need to increase their labour and workforce?

Invoice finance is a powerful financial tool that can help businesses improve their cash flow by unlocking the value of their unpaid invoices. Invoice Finance is used in many industries such as manufacturing, IT, software, pharmaceutical, engineering and transport. The key component when invoice finance is used is around Labour Hire within these industries. 

Invoice finance is a type of funding that allows businesses to borrow money against the amounts due from customers. This form of finance is particularly useful for businesses that face long payment terms or irregular cash flow. 

 

Often companies will take on projects that require labour to kick start projects. As a company increases it workforce to deal with influx of projects, the cost of labour can be paid while a company waits to get paid for the project. 

There are two main types of invoice finance: factoring and invoice discounting.

How Does Invoice Finance Work?

  1. Issue Invoices: You provide goods or services to your customers and issue invoices as usual.
  2. Submit Invoices: You submit these invoices to an invoice finance provider.
  3. Receive Advance: The provider advances you a percentage of the invoice value, typically around 80-90%.
  4. Customer Payment: Your customer pays the invoice to the finance provider.
  5. Receive Balance: Once the customer pays, you receive the remaining balance minus the provider’s fees.

Benefits of Invoice Finance:

  • Improved Cash Flow: Quickly access funds tied up in unpaid invoices especially with labour costs
  • Flexibility: Use funds for various business needs, such as paying suppliers or investing in growth.
  • Reduced Risk: Some providers offer protection against bad debt, reducing your financial risk.
  • Growth Support: Helps businesses manage growth by providing consistent cash flow.

Invoice finance is ideal for businesses of the named industries or that sell on credit terms, face cash flow gaps, or need to access funds quickly. It is particularly beneficial for industries such as manufacturing, wholesale, and services.

Invoice finance can be a game-changer for businesses where labour-hire is required and businesses are looking to improve their cash flow and financial stability during these times. By understanding how it works and the benefits it offers, you can determine if this financial solution is right for your business. If you want to learn more about invoice finance and how it can help your business, contact FIFO Capital Ireland today!

Contact FIFO Capital Ireland today to discuss cash flow strategies for your business.