The business world is full of jargon that everyone working outside that particular industry has literally no understanding of. It’s a bit like talking to your children with their seemingly made up language made just for them and people of the same age – we might as well be in a foreign speaking country for all we can understand.
Once you get used to the terms used in your own industry, it all becomes a lot less daunting and you can comprehend what everyone means and why things are done using that particular piece of equipment, legislation or in that manner. There is one area of the business – and it doesn’t really matter which industry you work in – where some things just never make sense, and that is HR and finance. Those working in that department are usually locked away in their own offices and you only tend to see or hear from them when there is some kind of problem.
You hear all kinds of words coming from that little office, especially around pay day with terms like PAYE and national insurance bounded about (usually because of how much money is taken away from you), but they also have the company accounts to look after as well as those of the employees. In that respect, a term that is often talked about is invoice factoring, something many will never have to deal with but are left wondering about none the less.
Invoice factoring is the process of releasing cash tied up in unpaid invoices from your customers and clients so it can be reinvested elsewhere – such as your salary, so it can affect you even if not directly. A lot of finance departments deal with agencies including sterlinginvoicefactoring.co.uk who will work on their behalf in order to chase payments that are owed, (it’s important to add here that they are not debt collectors, far from it). They save the initial company the time and effort associated with chasing payments, a highly laborious task in some cases, and allow them to get on with their daily jobs of handling the incoming and outgoing expenses each day without having to spend time on the phone chasing individuals. Instead, Sterling Factoring and other similar agencies do it all for them.
Rather than having to go through the often long sales process, draw up the invoice, send it out, wait for the money to arrive, chase it when it doesn’t and potentially even get lawyers involved; companies are able to use invoice factoring to send out the invoices and gain instant access to a percentage of what they are owed.
All businesses will use it differently according to the physical size of the business in terms of clients and customers, and how they choose to deal with them. Some choose to use spot finance whereby they use the systems for just one invoice that might be particularly problematic or to cope with staff absences, while others work on a larger scale because they haven’t got an in-house team large enough to cope with it all.
Whatever the reasoning behind the investment, those who have used the systems have done so easily meaning that they can get back to their full-time roles trying to sell goods and services and handle the all-important staff pay cheques – nobody wants those to be paid late!