Can Your Construction Company Grow Fast?
When it comes to the construction industry, companies without the ability to grow quickly will often get left behind and find themselves unable to take on bigger and more complex builds. Growth is key to success and maintaining a fluid credit facility is vital when it comes to growth. So how can construction companies ensure that they don’t struggle with cashflow problems that can impair their ability to grow?
Why Cashflow Issues Can Prevent Business Growth
Not only do construction firms have to ensure that they have funds available to purchase supplies, they must also make sure that contractors are paid promptly. As well as applications for payment, which are issued by contractors in place of invoices at various stages of a project, firms may be working under JCT contracts which, although designed to improve standards across the industry, can impose strict restrictions and seriously impact cashflow. This means that not only are projects often unable to be completed but the ability to take on new projects is often impacted too.
Invoice Factoring Helps Construction Firms Grow Quickly
There is a quick, easy and cost-effective way to ensure that you and your contractors are paid quickly when working on projects of any size. Invoice factoring effectively means that you work today and get paid tomorrow. Put simply, it releases equity tied up in your unpaid invoices, with up to 90% of the value of invoices paid to you within 24 hours. This means you can complete projects and move on to whatever is coming next, allowing you to meet customer expectations and keep contractors happy.
Spending all your time chasing unpaid invoices is detrimental to business growth too. Invoice factoring funders can take care of the accounting side of things, dealing directly with customers for invoice payments. When invoices are paid, the funds are released to the construction firm, minus any agreed fees. Invoice factoring helps to improve your firm’s reputation for reliability whilst also saving you money on your staffing and operating costs, as there is no need for an accounts receivable department.
Client Relationships Foster Business Growth
As any construction firm knows, maintaining positive client relationships is key to growing your business. If you prefer to deal with collecting customer payments yourself, then invoice discounting may be the right option for you. This service provides all the benefits of invoice factoring (work today, get paid tomorrow), whilst allowing you to stay in control of your relationship with clients as you will still collect payment on invoices directly. For smaller companies, this can help to maintain a personal touch when it comes to client relationships while allowing you to eliminate issues with cashflow that could be hampering the growth of your company.
Large or small, construction firms of all sizes can benefit from construction factoring and discounting. So if you would like to enjoy improved cashflow and spend your time focusing on growing your business, get in touch with us today. To find out more about what’s involved, just call us on 0333 772 1558 or email contactus@simplyfactoringbrokers.co.uk.