The Financial Challenges Facing Cleaning Companies
Commercial cleaning companies are seeing a huge surge in demand for their services as businesses scramble to clean and Covid-proof their offices and working environments – what historically has perhaps been little thought about, happening when the staff have all gone home has now been bought into the light.
This has led to an increased workload, and with it, the need for more cleaning staff. Unfortunately, this extra expense often puts a strain on the cleaning companies cashflow – having to pay weekly wages before the increased profits begin to flow through. Added to this, clients can be slow to pay their invoices because of their own cash flow pressures due to the impact the past 2 years have had on business’, putting strain on already tight budgets and making it difficult to meet financial obligations for the cleaning companies themselves.
Financial challenges faced.
Cleaning companies are doing all they can to stay afloat during these challenging times but still face financial challenges such as:
An increased workload is great for any business but only if they have the capacity within their available cash flow to maintain that growth. If they don’t have a healthy cash flow taking on additional contracts and increased workloads will have detrimental financial implications on their business.
Extra Staffing Costs.
Employing extra staff has a significant impact on a company’s cash flow. Paying salaries and other associated costs, quickly eats into the cash that is available.
An increased workload and employing extra staff also mean you need extra equipment and supplies. Equipment doesn’t come cheap. Managing upfront costs makes a significant dent in your available cash.
Late Payment Issues.
Another issue that cleaning companies are facing is late payments. Often clients will wait until the last minute to pay or go past the agreed payment date terms, putting a financial strain on the company causing further cash flow pain and making it difficult to meet day-to-day expenses . Often this is compounded where there is one large debtor accounting for the bulk of the business. With any form of overdue payment quickly putting significant pressure on the business.
Poor Credit Control.
Many small businesses find credit control to be a daily struggle, with raising invoices being just the start from the follow up telephone calls, emails, letters and monthly statements, chasing for payment through to reconciling accounts and managing cash books can equate to a lot of time spent. Employing the services of a fully outsourced credit control facility will enable a business to concentrate on the actual business needs and growth without constantly trying to fit in time for productive credit control.
(H3) Help is out there.
For cleaning companies that are struggling with cash flow issues, credit control and chasing for late payments, there is the help out there! This comes in the form of Invoice Finance. Invoice finance is a viable option aimed at small – medium businesses to assist them in maintaining a stable and healthy cash flow which allows them to meet all their obligations.
What is Invoice Finance and How Does it Work?
Invoice finance makes sure that your cash flow is expertly managed. It’s an alternative form of finance that allows your company to access cash sooner than waiting for payment from customers. It’s a service that grows with you; a method to manage your cash flow and cut down the time strain of collecting payments yourself. It’s like having an additional financial department and safety net. As you grow your business, it keeps pace with your needs and will help support growth. The truth about factoring is, it’s a wise choice for a growing business and is ideal for small-medium businesses selling to other businesses on credit terms.
Entering into an invoice finance agreement is a fantastic way to get access to your money without giving up any equity or personal assets and allows for long term growth rather than short-term gain. Appointing an accredited funder to manage your invoice finance is a big decision – one that you need to get right.
Contact us today so, we can discuss your options.