22 Nov Discover How to Optimize Cash Flow so That Your Business Can Grow Faster & Easier!
When it comes to growing a business there is something more important than just the profits it is generating.
The most important factor for sustained business growth is optimizing cash flow.
The simple truth is it doesn’t matter how much money your company is generating every month if you don’t have that money on hand when you need it. Unfortunately, for companies involved in the IT supply chain, not being paid on time is a common problem. The result is a lack of payment flexibility that can ultimately drive a company out of business – even a company that is otherwise successful. To succeed in today’s competitive marketplace, you absolutely need to have an optimized cash flow – and that’s where BidFin can help.
BidFin is an Australian based Fintech company that is focused on helping the IT supply chain drive sales and improve cash flow. BidFin accomplishes these goals by providing a working capital solution that enable companies to extend their Supplier payment terms (or credit terms) by up to 30, 60 or 90 days. The Ultimate Cash Flow Solution for Payment Flexibility …
The great thing about BidFin’s Extended Payment Terms is that it provides valuable payment flexibility whilst also ensuring the Supplier is paid 100% of the invoice value on the invoice due date.
Once an Extended Payment Terms facility and credit limit is setup companies can then access an online portal, load their Supplier invoices, select their preferred extended terms (30, 60 or 90 days) and then repay that invoice by direct debit. When an invoice has been repaid they can reuse the facility to extend terms on future invoices.
Here’s an example of how it works:
One recent BidFin client was having cash flow problems despite very robust sales. As can often be the case in the IT industry, they weren’t receiving timely payments from their customers and this was putting them in a bind when it came to pay their own bills and to buying much needed goods and services from their own Suppliers. Using BidFin’s Extended Payment Terms they were able to gain the payment flexibility they needed to operate more efficiently.
More specifically this cash flow solution:
- Allowed them to close the cash flow gap between their purchases and sales and better match their incoming and outgoing cash flows
- Increased their purchasing power
- Improved their credit purchasing history
- Let them stop spending valuable time either incenting customers to pay early or chasing customers who hadn’t paid and, instead let them focus on what they did best, providing their clients with market-leading IT solutions.
In this particular instance, the company used its multi-million-dollar facility to extend terms on specific distributor invoices for a period of 90 days. With BidFin’s Extended Payment Terms facility there is no application or invoice draw down fees. The program’s fixed service fees are typically better than rates offered by short term loans and the program doesn’t come with the strict monthly payment requirements that may accompany any short-term lending. Customers can also choose to pass on those same Extended Payment Terms to their end clients in order to close a sale or avoid large scale price discounting. The final word is that Extended Payment Terms can be a powerful way to close the cashflow gap between purchases and sales and boost your purchasing power.
Additional Payment Solutions
In addition to Extended Payment Terms, BidFin offers several other payment solution offerings.
For instance, companies can choose to take a large upfront invoice and spread that cost into monthly payments, this is ideal if a business needs to do any of the following:
- Preserve its cash and credit lines
- Needs to show ROI over time with costs spread out versus showing a big lump sum expenditure
- Structure a solution as a monthly cost
- Wants to buy add-ons but doesn’t want to sacrifice other budget items
Here’s an example of how this solution was utilized by a recent BidFin client:
- The company needed $770,000 to purchase software from two different suppliers.
- The company didn’t have that amount of money on hand but had a real need for the software to continue growing. So, the client decided to use BidFin’s spread payment option to split the total amount across 12 monthly payments.
- These spread payments allowed the company to purchase a complete solution and avoid a significant upfront hit to their cash flow that would have impacted their remaining IT budget.
The spread payment option offers:
- Competitive rates, no application fees, quick turnaround
- The chance to turn a large upfront outlay into affordable scheduled payments
- Payment flexibility and simplicity – including putting all purchasing costs into one payment agreement
- Spread payments over time to conserve capital
- Cash flow optimization through smaller equal payments made over time
In this article we have presented just two of the payment solutions BidFin offers to the IT supply chain. Companies may also want to consider BidFin’s deferred payments, ramp payments, custom payment terms and rental or leasing options.
The Bottom Line …
By taking advantage of the right working capital solution and payment solution offering, a company can better make their cash work for them. And carefully controlling available cash on hand is one of the best things a business can do to ensure future growth. The BidFin payment solutions mentioned in this article are designed to allow companies to do just that.
To learn more about BidFin, please visit https://www.bidfin.io/.
All BidFin products are subject to credit approval.