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To run a successful bodyshop, it is crucial to manage time and resources effectively. Many bodyshop owners struggle with maintaining steady cash flow, which can impact efficiency.
Invoice factoring offers a financial solution to ease this burden by stabilising cash flow and freeing up resources to focus on quality service. Let’s explore how invoice factoring works and how it can enhance efficiency for bodyshops.
Invoice factoring is a financial service where a bodyshop sells its outstanding invoices to a third-party provider, such as ACG. Once the bodyshop completes repairs and issues an invoice, it can factor the invoice to get prompt payment. This allows the bodyshop to access funds quickly, instead of waiting for payments from networks or insurance companies, which can take up to 90 days.
One of the primary benefits of invoice factoring is the swift infusion of cash into the bodyshop. By having immediate access to cash, bodyshops can avoid late fees, reduce key-to-key time and focus on getting customers back on the road.
Chasing invoice payments can take up valuable time when it comes to running a bodyshop. By using an invoice factoring service, they will take on the responsibility of collecting the outstanding payments, which frees up the Bodyshop’s team. Overtime this will increase productivity, meaning repairs can be completed without delays, allowing for bodyshops to take on more jobs, resulting in business growth.
Having consistent cash flow from factoring can also improve a Bodyshop’s relationships with its supply chain. When payment is made quickly and on time, it builds trust between the bodyshop and its suppliers. With access to better materials at potentially discounted rates and improved terms for ordering parts, the shop can increase profit and ensure higher-quality repairs. This can lead to more satisfied customers, repeat business, and improved resource efficiencies overall.
Invoice factoring can significantly contribute to a bodyshop’s success by improving financial planning and forecasting. By converting outstanding invoices into immediate cash, it provides a reliable cash flow, allowing bodyshops to predict their finances with greater accuracy. This predictability helps in managing day-to-day expenses, planning for upcoming costs, and avoiding cash flow gaps. Therefore, bodyshops can make more informed decisions, invest in growth opportunities, and maintain stability in their operations.
Incorporating invoice factoring into a business brings numerous benefits, and the positive effects can be seen quickly. It can rapidly boost efficiency, eliminating the waiting game and allowing businesses to experience the rewards almost immediately.
Adam Thurman, Managing Director at EV Bodyshops recently shared with ACG how using invoice factoring has helped improve resource efficiencies within the bodyshop.
“The opportunities ACG has unlocked for us as a business goes beyond what we initially expected, not only is our cash flow in the right place, but it has enabled us to streamline our headcount, saving over £105k in wages, and allowed the business to buy parts quickly without credit lines, permitting us to push for better terms on discount. Due to the complexity of our repairs and the premium brands we see going through our bodyshop we would have struggled to grow year-on-year without ACG.”
Invoice factoring offers bodyshops a powerful solution to enhance resource efficiencies and improve overall operations. By providing immediate access to cash, it helps address cash flow gaps, enabling bodyshops to focus on essential tasks, like repairs and customer satisfaction, rather than chasing payments. With the ability to better manage finances, plan for future expenses, and streamline operations, invoice factoring empowers bodyshops to thrive in a competitive industry.
If you’re ready to take your bodyshop to the next level with improved success and efficiency, speak to the experts at ACG.
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