According to research by UK Finance, support for businesses through invoice finance and asset based lending at the end of 2018 stood at £22.7 billion.
It is estimated that over 42,000 UK businesses use invoice finance as a cash flow solution. For recruitment agencies, this form of funding means receiving payments more quickly and paying contractors on time, so they can take on more work.
Perfect. But what if you’re no longer happy with the service, or you’ve been with a provider for a period of time and heard that there is a better deal to be had elsewhere?
For businesses already using invoice funding, it is worthwhile regularly reviewing the agreement to ensure you are satisfied with its terms and performance – just as you would with other service providers.
Better the devil you know?
We know that business owners can be reluctant to transfer to another provider. This applies not only to invoice funding, but other third party services too. It’s human nature to put these things off. Maybe a lack of time, complacency, even hesitation because of the perceived complexity of switching can result in many of us sticking with a service or supplier despite being unhappy, or knowing there are better deals available.
Why do recruitment businesses make the decision to switch?
In our experience, the five main reasons for switching invoice funding supplier are:
- Unsatisfactory levels of customer service that can be slow to respond or not fully understand the needs of your business.
- The fees are too high and you want to find a cheaper option.
- Inadequate technical support or user interface that is causing frustration and lost time for you and your team.
- Insufficient levels of funding are available to you, particularly as your client base and business grows.
- You have new requirements that can’t be met. Perhaps you have started working with permanent as well as contract placements, or you have international clients and need your provider to process different currencies.
What do you need to do to switch invoice funding provider?
Once the decision has been made to review your current finance provision, outline the areas that you are most satisfied and unsatisfied with. This helps to draw up a list of key questions to ask the new suppliers. It is advisable to contact at least two different suppliers.
As well as gathering and comparing information about fees, funding limits and service offerings, make sure you speak to the prospective providers. Or, at the very least, have a dedicated point of contact to reach by email. This is particularly important if one of the reasons for switching from your current supplier is poor customer service.
Always ask about the transfer process. The invoice finance provider should have a clearly defined procedure for enabling a client to switch easily and without fuss or disruption to their own clients and contractors.
And finally.. consider asking a prospective provider to put you in touch with an existing client, so you can ask about their experience of switching. Remember, there is no obligation or rush to switch providers until you are happy and ready to do so.
Find out more about How to Switch Invoice Finance Provider with 1PS. We offer new clients a Transfer Pledge – to ensure a seamless and headache-free transfer from your current provider. Download and read the 1PS Transfer Pledge here.