Founded in 1982, Bibby are a major provider of financial services in the UK. They support companies in over 300 sectors, funding to more than 7,000 businesses. They also specialise in several specific industries, and are a key invoice factoring provider for recruitment agencies.
With modern practices and innovative methods, they are also the recipient of several awards, including regularly featuring highly in the Sunday Times best company to work for list.
What is invoice factoring?
Invoice factoring is an efficient and effective way to free up cash flow without putting the company into debt. By selling the value of invoices owed to you to the factor, they provide a large percentage of its value, typically 85%, within 24 hours. Once the debt has been paid by your client, the other 15% will be released, minus fees.
There are several advantages in accessing the services of a professional and reputable factoring company like Bibby. Whether invoice factoring is right for your business will depend on a number of issues, each of which should be carefully considered before signing any contracts. The main advantages include:
Possibilities For Investment
At the heart of any cash flow solution is easy access to funds. Even the most prompt of invoice payments can take several days to clear. As invoice factoring allows for funds to be accessed within 24 hours of application, investments that would otherwise not be possible can provide vastly improved turnover.
This can also help in the day to day running of the business. Bulk buying of equipment, especially over the long term, allows a business to cut down on overheads as well as greater planning.
This planning itself can lead to a clearer and more efficient business. Any company with a focused and attainable goal is much more likely to succeed in the long term than those whose options and scope are constrained to short-term targets.
On top of this, the amount of manpower that is lost to jobs that staff are not suited for cannot be devalued. Unless your company has an in house financial department, something that is beyond the scope of most, employees that have to deal with the intricacies of business finance and the time consuming nature of chasing late payments, is often inefficient and can lead to costly errors. As Bibby are experts in the field, you can rest-assured that such errors are avoided while allowing staff to focus on tasks they are trained for.
It is not only the services of a company that provides a picture to your clients, professional financial correspondents are at the acute end of all transactions and billing. Not only can this speak volumes in regards to reputation, it can also affect how your clients respond.
Late payments are usually a matter of oversight rather than a refusal to process invoices on time. Studies have shown that clients who receive the type of professional invoicing that Bibby provide are far more likely to make payments on time and late payments are typically resolved in a timely manner.
Bad Debt Protection
Bad debts are outstanding invoices that a client is either unwilling or unable to pay. This can be for several reasons ranging from disputed goods or services to the client’s bankruptcy.
Non recourse factoring means the factor, takes on the responsibility of the debt. As Bibby Financial Services have the knowhow to deal with such situations, this allows you to access funds that would likely be otherwise lost forever.
As the minimum annual turnover required to access factoring services can be quite high, the employment of Bibby Financial Services Invoice Factoring is not something to be entered into lightly.
With this in mind, Bibby offer a guaranteed refund should you not be satisfied with their services. This offer extends for up to three months meaning you are able to get a full grasp of any issues that might occur, providing a high degree of peace of mind when entering into a contract with the company.
As with any form of funding, there are disadvantages to invoice factoring, including that offered by Bibby Financial Services. While these are not necessarily universal problems, they do need to be taken into consideration. The main disadvantages include:
The factor will of course need to make sure that the service you are accessing is profitable for them and Bibby are no different in this respect. While Bibby are a respected company, it is important to fully understand the contract you are signing.
One of Bibby’s main advantages over other providers is that they allow smaller businesses to access their invoice factoring service. Companies with an annual turnover of just £10,000 are at least theoretically able to access their factoring service but there does need to be a relatively high level of security with the business for any factoring company.
This is especially true of Bibby’s non-recourse factoring, where they take on the liability of bad debts. This is unfortunate, if understandable, because smaller businesses are those that are particularly at risk from non-payment from their clients.
Reliance on the Factor
As with all funding, Bibby Financial Services are, to a large extent, in control of your general finances. This can lead to a degree of insecurity that can in itself be restricting. It is for this reason that it is imperative that you research your provider thoroughly and understand the implications of any contract you are signing with them.
Bibby Financial Services are one of the most highly regarded independent financial services in the UK and as such are trusted by many thousands of UK businesses.
Our guide to the top 10 invoice factoring companies in the UK should help paint a picture for what else is available.