It can be tricky to choose an Invoice Finance Provider, hence why we made a guide in our previous blog. This process can be made to be more difficult when the existing or potential clients are not given the full picture. Is your provider clear with their pricing structure? Are you able to access decision makers when you need to? Along with these questions, the following five factors should be considered to see if your provider is delivering all that they should be.
Monthly Minimum Fees
A fee is normally charged by an invoice finance company to ensure that they don’t make a loss. Minimum fees shouldn’t impact a business if their turnover is predictable. However, if you have a low turnover, these minimal fees can be detrimental. You can get your Invoice Finance Provider to structure your minimal fees to be paid annually rather than monthly. Some providers do not charge a fee at all, so it is worth reviewing your current arrangement.
Offering Pre-Built Packages
Bespoke packages are something that cannot be offered once a factoring company grows. Instead, these growing companies will offer inflexible packages. Every client will have different needs and it can be somewhat unfair for an Invoice Finance Provider to ask you to fit around their needs. Again, shop around to ensure you go for a provider that fits your needs entirely.
Obscure and Unfair Pricing
Many Invoice Finance Providers will offer amazing headline rates to attract new clients. Once the contract is signed, additional costs can be evident. This is something that some clients may not be aware of. The solution to this is simple. Pricing should be transparent and fair to clients, regardless of whether their business is big or small.
Inflexibility over the Contraction and Spread of Debtors
There can be restrictions on funding if one debtor makes up more than a specific percentage of the overall ledger. Thus, plenty of clients may only have a single customer. Which would result in providers need to be more relaxed. And in this respect, 100% spread needn’t be a negative.
Employing ‘Client Relationship Managers’
A number of problems can arise when there are multiple points of contact in larger financial services companies. As this means different levels of seniority and responsibility. Which then can result in decisions being slows and larger clients being given higher levels of service. But we believe that all clients should be treated equally, with the same amount of respect and service.