is One way to reduce the risk of debt and cashflow problems is to factor all your invoices.
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In effect, you "sell" them to a factoring company, which takes over responsibility for collecting the cash. You can draw up to 80-85% of the money you are owed immediately, and the balance is made available when your customer pays up.
Lombard NatWest is among the companies offering such a service. It charges from 0.75% to 2.50o of the invoice value, and perhaps 0.5% more if the money is owed overseas.
Although you can take the bulk of what you are owed instantly, you'll be charged 1-3% over the base interest rate . Wait until Lombard NatWest Is itself has been paid and it won't cost you anything.
SAF Logistics, based in Goole, East Yorkshire, employs Lombard NatWest, and managing director Stewart Franks is pleased with the service. "It costs me £8,000 a year, and although people say that's expensive I'd have to pay a full-time credit controller considerably more,he points out.
Also worth considering is credit insurance, especially if 80% of your work comes fromjust one company as it allows you to insure the consequences of that firm going bust. Credit & Guarantee is one of the best known groups offering such policies.
It's also possible to insure your entire book of business if you wish.