How bodyshops can utilise invoice factoring to weather the winter season

There are numerous seasonal challenges bodyshops face during the colder winter months. From increased operating costs to an influx of more repairs, as well as longer repair cycle times, all of these factors can significantly impact the efficient running of a bodyshop and its bottom line.

A key to success for bodyshops during this time is to maintain a healthy cash flow which will enable them access to funds and streamline their resources. However, this can be a tough achievement, due to lengthy payment terms for approved repairs, resulting in a delay in funds coming back into the business. Many bodyshops choose to factor their approved repair invoices, getting money back into the business within 24 hours.

In this blog article we’ll discover why bodyshops choose to factor their invoices, especially during the winter season, and what are the key benefits.

Understanding the Winter Challenges for Bodyshop Owners

Winter poses many different challenges for bodyshops. Historically, the period has always been seen as a boom for those in the industry due to more car accidents. However, COVID-19 turned everything on its head, and repair volumes have yet to return to the pre-pandemic frequency and patterns. Although recent data suggests that private car usage is back to normal, we could be in a position where this traditional seasonal influx returns.

One of the biggest challenges bodyshops face during the colder months is increased operating costs. The energy consumption of a bodyshop soars during winter to heat spray booths, ensuring repairs are cured and processed through the shop floor quickly.

All of these factors put an immense strain on the financial stability of the bodyshop and its bottom line, highlighting the importance and significance of cash flow.

What is Invoice Factoring for Bodyshops?

Invoice factoring for bodyshops is a quick and simple way for them to receive payment for authorised repair invoices, mitigating the need to chase networks and insurance companies for payment, which can take anywhere up to 60 days plus – freeing up time and resources.

Partnering with a reputable factoring company ensures that the process of managing unpaid invoices is easy and straightforward. Take for example, ACG, who have been a leading funding partner for Bodyshops in the UK for over 15 years. ACG’s Marketing Manager, Liam Cowling said.

“We understand the need for bodyshops to gain access to their funds quickly, especially during peak months. Once new customers have passed our due diligence, they are on our system, and we are ready to fund within 24 hours. We’re very proud that in our years of service, we have never missed an SLA.”

The Advantages of Invoice Factoring for Bodyshops in Winter

The immediate benefit for a bodyshop to factor its invoices is the positive impact that it has on the company’s cash flow, enabling the bodyshop to cover its operational cost, especially during high volume periods.

One thing to look out for when researching a factoring partner for your bodyshop is to find out the level of flexibility they offer. For example, ACG offers its customers a pay-as-you-go service that allows them to factor their invoices as and when they want. Giving bodyshops a brilliant service for seasonal fluctuations.

Invoice factoring is completely different from any other funding service, meaning there is no debt accumulation, unlike loans, and will not add to the debt on the company’s balance sheet.

Finally, invoice factoring can improve supplier relations as the consistent cash flow enables bodyshops to pay their suppliers on time, building better business links and opportunities to reduce costs.

Case Study

Tania Davis, Director at UK Autolinks, a bodyshop in Nazeing Essex, shared her thoughts on why she factors her approved repair invoices, and why it especially helps her business operations during the winter months.

“The winter months are harsh on everyone’s pocket. As an SME, it’s very important to streamline operational costs in order to make a profit. We are all due an impending price increase on Gas, Electric and Fuel Pump prices. At least with ACG, you don’t have to wait longer than necessary or spend the time to chase up overdue invoices owed, they take the headache away and in a way is an additional member of your administration team. Eliminating the cost of an additional overhead to your business.

“Bodyshops typically expect a work volume increase during winter months, and this is when ACG is most beneficial, as we all become a part of the beast that gives us no time for grace and forces us to stay too focused on delivering best practices, on SLA’s, clients journeys with less daylight hours. Stop chasing your tail, especially with unpaid/overdue invoices – stay focused on your business and let ACG handle your invoice payments.”

There is no doubt that the winter months pose differing pressures on bodyshops, but the advantage of utilising invoice factoring as a strategic tool for financial stability can make those cold months a little warmer, ensuring the business is in a profitable position for the future.

If you’re a bodyshop manager or owner and are interested in further details about invoice factoring, speak to the experts at ACG and see how they can support your cash flow this winter.