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InvoiceAction Example Industries
Does your industry suffer from poor cash flow? The following are examples of industries where cash flow issues can represent significant obstacles to growth. With a small incentive, InvoiceAction can help turn these potential headaches into opportunities to trump the competition: 1) Staffing – Temporary Worker – Recruiting Industry. Companies in this industry supply laborers to other companies that may be experiencing increased demand, need staff to cover for workers on vacation or temporary leave, or have short-term projects that require extra hands. The companies generally pay their temporary staff on a weekly basis. However, oftentimes, they are not paid by clients for 30 to 45 days after invoicing, meaning they have to cover from 4 to 7 payroll cycles before they are paid themselves. The cash demands of financing payroll can severely limit growth. 2) Janitorial Industry. Companies in this industry make sure that we all live in work in clean, healthy conditions. They have two heavy demands for cash. Not only do they have to cover payroll, they also have to purchase cleaning materials, supplies, and equipment. As in many industries, these companies typically bill their clients on a monthly basis. However, they usually don’t receive payment for 30 to 45 days after invoicing, meaning they have to finance their supplies and payroll for over 60 days. 3) Delivery Services. Companies in this industry help us efficiently transport goods and important documents when time is of the essence. These companies have to finance large expenditures for both fuel and payroll. They usually invoice clients in batches on a weekly or monthly basis and wait from 30 to 45 days for payment. With the recent increase in fuel costs, cash flow can be a major issue. 4) Manufacturing. Companies in this industry make the products that we buy and use everyday. To do that, they have to purchase raw materials, pay their workers, and cover the cost of overhead and pieces of expensive, specialized equipment. Having to wait 30 to 45 days to be paid on invoices means that less supplies can be purchased, which leads lower production and slower growth. To compound the cash flow issue, manufacturers often sell their goods to clients on a credit basis. Hence, in order to survive, these companies have to have an excellent command of their finances to maintain profitability. 5) Importing. Companies in this industry buy goods from overseas and sell them to middlemen, retailers, and even directly to consumers. Companies in this industry often pay for their goods 30 to 60 days before delivery. Then, their customers can take from 30 to 90 days to pay for the goods. That means these companies often have to finance their inventories for as long as 2 to 5 months! With their money tied up, the importers can’t order more inventory and increase business. Find the right mix of inventory financing, factoring, and growth can be a tricky proposition. 6) Trucking/Transportation Industry. Companies in this industry haul large amounts of goods on a local, regional, and nationwide basis. As with Couriers, these companies have to purchase fuel and cover payroll. They invoice clients on a weekly basis, but still have to wait for 30 to 45 days before receiving payment. On top of that, profit margins in the industry are usually very thin, so financing costs can severely impact profitability. 7) Healthcare. Companies in this industry help keep us healthy and heal us when we’re sick or injured. Companies in this industry have to pay staff, buy supplies and fund the purchase of expensive, highly specialized pieces of equipment. However, Insurance Companies and the Government (Medicare / Medicaid) can take as long as 120 days to pay outstanding invoices. That’s a long time for any company to have to wait for payment. These industries all serve important functions in our economy and allow us to lead better, more productive lives. However, cash flow can often be a large obstacle to growth, especially when other forms of credit aren’t able to keep up with the heavy capital demands of expansion. Through the use of InvoiceAction, these companies and countless others can acquire the cash needed to grow their businesses, while putting money back in the pocket of their clients and creating customers for life. |