Choosing the right invoice factoring company for your bodyshop

Invoice factoring is a quick and simple way to get cash quickly into your bodyshop. Not only can it improve cash flow efficiencies, but the knock-on effect it can have on resources and processes enables bodyshops the opportunity to focus on critical tasks and growth strategies.

However, to make this happen, it’s important that bodyshop owners and managers do their due diligence to partner with the right factoring company for long-term success and a positive working relationship. To ensure a bodyshop gets the most out of working with a factoring company, these are the key considerations they need to keep in mind:

Industry experience

The body repair industry is complex, to say the least. Daily, a bodyshop owner can deal with insurers, paint companies, accident management companies, and network providers, to name a few. This complexity means that when exploring factoring companies to work with, owners need to partner with a supplier who has a strong background and understanding of the industry. Working with a partner who has industry-specific knowledge of the UK body repair industry, guarantees that they fully understand your business and can lead to tailored solutions and a stronger working relationship.

Reputation & credibility

It’s essential that bodyshop managers and owners spend time assessing a factoring company’s reputation and credibility before moving forward with a working relationship. There are numerous ways that this can be done, from checking online reviews and testimonials, to looking at their social media, which trade bodies they work with, or whether they have won awards, etc. Plus, there’s word of mouth, speaking to people in the industry, other bodyshop owners, and customers – are all valuable indicators. Conducting a wide search fills out your understanding of the potential factoring partner and gives you an understanding of how they operate.

Terms & rates

Ensuring profitability is a number one priority for any business, especially for bodyshops. Although factoring fees tend to be nominal, companies do tend to structure their terms and rates differently, so bodyshops must speak to their potential factoring companies in depth about costings. Common factoring fee structures can be anywhere up to 5%, but this rate can either be charged on the net or gross value of the invoice – making a considerable difference.

Customer service & communication

With the added benefits of cash flow efficiencies through factoring, it’s essential that communication is effective between the bodyshop and the factoring company to maximise opportunities and make a positive contribution to the day-to-day operations. So, when bodyshops are exploring factoring partners, it’s valuable to ask questions about customer service, communications, whether they have service level agreements (SLAs) in place, and really flush out what the process is like so that owners can make sure they are getting the very best for their bodyshop.

Flexibility of services

When considering a factoring company, bodyshops need to explore the flexibility of the services that are on offer to ensure it meets the needs of the business. What managers and owners don’t want to happen is to sign up for a factoring service and have unexpected surprises pop up, like minimum monthly invoices to process or a hike in fees. When speaking with factoring companies, discuss the ins-and-outs of their service. For example, is it a pay-as-you-go model, or is there an expected monthly number, or do they offer a contract agreement for preferential rates? All of this is important so that owners can set their expectations and plan for the future. Because the solution that is right for the business now might not be the one needed in a year or two’s time.

Making the right decision

The right decision is based on a methodical and in-depth analysis using the information at hand and sound reasoning. Through exploring the consideration above, bodyshop owners can explore and investigate which factoring company best suits their operations and growth aspirations. A well-chosen factoring partner will reinforce a bodyshop’s financial success and support future trajectory.

Additional Resources:

If you’re a bodyshop manager or owner and interested in factoring repair invoices, speak to ACG about their wide range of funding solutions.

For over 14-years, ACG has been a leading invoice funding partner for UK bodyshops. Their expert team processes thousands of invoices each month for its growing customer base. ACG works closely with partners throughout the UK body repair industry to bring its customers an effective solution to boost cash flow efficiencies, unlocking growth potential. Its scalable and flexible funding solutions means they have a product that works for your bodyshop, don’t just take their word for it, read their customer success stories here (LINK).

For more information about how ACG can support your invoice processes, get in touch.