The manufacturing business has been growing rapidly for the past decade. Now, more than ever, it is important that manufacturing businesses have strong finances to meet the ever changing needs of clients. In the manufacturing industry, it is not uncommon to find that businesses struggle to stay afloat financially.
Using Manufacturing Invoice Factoring to Tackle Common Challenges
Due to the invoice-based nature of your work, you are constantly waiting for invoices to be paid and processed. With slow paying clients comes major cash flow issues. Thankfully, there’s a solution. With manufacturing factoring, you can get up to 96% of your invoice total in your account in just 24 hours or less—without the risk.
When your cash flow is low, your employees are the first to suffer. With poor cash flow, managing and distributing payroll is practically impossible. You simply lack the cash you need to pay your clients.
With manufacturing invoice factoring, you will be able to better manage your business’s payroll expenses every pay period. With invoice factoring, your business will be able to secure a strong source of working capital practically overnight. This allows you to completely skip the normal time it takes for your clients to fulfill payment on their invoices.
2. Upgrading & Repairing Equipment
In the manufacturing business, you’re only as good as your equipment. Keeping up with the best businesses in the industry requires you to constantly maintain and upgrade equipment.
When is it time to upgrade your equipment? It’s time to start upgrading your equipment when you notice the following:
- Your rate of returned products is increasing
- Your machinery is producing a higher number of defected products
- Maintenance on equipment is more costly
- It is hard to find parts to keep your equipment running
By using manufacturing invoice factoring, you’ll always have the funds necessary to update or repair your equipment, allowing your business to stay in line with competitors.
3. Broaden Your Clientele
In the manufacturing business, taking on new clients when cash flow is low is a dangerous venture. Without cash in your pocket, it makes it nearly impossible to purchase the proper amount of materials needed to complete their order.
Growing your business is impossible with this problem in your way. Using factoring, you’ll be able to have the cash in your pocket to not only complete current jobs in need, but also take on more clients and expand clientele.
4. Increasing Inventory
Insufficient supplies and materials can lead to loads of trouble—especially when your cash flow is low. With little cash in your pocket, you have to wait until you get paid in order to have the funds for inventory purchases, causing you to get behind with the progress of your clients’ orders.
Using manufacturing factoring, you’ll have the opportunity to stock up your inventory to ensure you’ll never be put in a compromising situation with clients. Manufacturing factoring, also allows you to save money on inventory orders. Typically, suppliers reward customers that buy in bulk, By utilizing invoice factoring, you’ll be able take advantage of these promotions at a moment’s notice because you’ll have a strong source of working capital.