Selling invoices is something that many companies choose to do, especially in times of difficulty. There’s nothing more annoying for a business owner than outstanding invoices, which is why they might decide to cut their losses and sell them instead. If you are having ongoing issues with an invoice unpaid by your clients, make sure you think about the best course of action for your unique needs. Keep reading to discover some of the top reasons why companies choose to sell invoices, so you can decide if this is a good option for you in the future.
Too Long to Wait to Get Paid
Should you find yourself in a difficult situation when it comes to your finances and waiting for unpaid invoices, selling unpaid invoices could be the way forward for your business. Many companies allow clients to wait 30, 60, or 90 days to pay an invoice, but this can be a huge amount of time to wait if you find yourself in a difficult financial situation. A client can use your products or services and then sell them on, before finally paying you the money that they owe you. There are even some industries that allow invoices to be paid after 120 days, which takes you into the next financial quarter for your business expenses.
While some clients are great at paying outstanding invoices within a matter of days or weeks, others will wait until the day before the deadline so that they can hold onto their money for as long as possible. If you do choose to sell invoices, you’ll find that you can receive payments in as little as 24 hours, giving you access to cash almost immediately. When you are struggling to pay your employees or expenses, this could be a very quick and easy way out of your current troubles. It’s one of the top-selling invoice reasons that we see companies share, and it’s no surprise that this is a good option in emergency situations.
Overdue Invoices
Another purpose of selling invoices is to get rid of invoices that are overdue. If your business cannot wait any longer for someone to pay you, then this is a good way to get some funds into your account without waiting any longer to chase up an invoice. When you need to pay your employees or for your own expenses, then this might be the only choice you have when you are owed a huge amount of money. We recommend always being extremely clear with your clients about the terms of your invoices upfront, which can help to avoid this issue with an invoice unpaid in the long run. The clearer your terms are and the more penalties you add for overdue invoices, the easier it will be to make people pay on time in the future.
Financial Emergencies
You never know when you might find yourself in a difficult situation financially. If you suddenly notice that you are unable to make ends meet one month, selling invoices could get you out of this situation quickly. We don’t recommend relying on this as a long-term solution, but it’s ideal for those times when you simply don’t know the answer to the question of how you are going to pay your bills and employees this month. The great thing about using this type of service is that within a few days you’ll have your money in your bank, and you’ll be able to work to rectify the issues you are currently facing.
An Unexpected Bill
From time to time, companies find they receive a bill for expenses that they aren’t expecting. You might not have thousands of pounds in the bank to spare, which may be what you need to resolve this issue. If your vehicles or machinery suddenly need repairs, then this could be an easy way to pay this bill without forfeiting the profits of your company in the long run. Make sure you are always thinking ahead though when using this service and try not to rely on it every month. If you do find you need to sell invoices regularly, then this might be a strong indication that your finances are not in a good position, or you need to be stricter about your terms of payment.
As you can see, there are many reasons why companies choose to sell invoices. It’s so important that you are very clear in your terms and conditions of payment, as you’ll find that this can help to reduce the number of unpaid invoices you have in the first place. Our team will be here to support you at any time with this challenge and ensure you are in a good place moving forward with your finances. Contact us today for more information or to discuss how we can support you with this task.