When Circle Fencing answered the needs of their customers by granting extended terms, they were faced with a serious cash flow dilemma. "With the state of the economy, our raw material suppliers were less than excited about matching the terms we were giving our customers. A few even cut our credit lines in an attempt to limit their total exposure. We were struggling to maintain sales and felt the only way to attract new customers was for us to offer better terms."
We understood his cash flow challenge and provided a win-win solution for him to grow his sales while keeping his suppliers happy. "With Gateway, my only concern now is how big to grow!"
Few companies feel the squeeze of an economy more than a fencing products provider. When your primary customers are ranchers and farmers, the slow economy can really take a toll. Sometimes it makes sense to re-evaluate the terms you offer your customers and try to help by relaxing those terms. But when your vendors do not share your enthusiasm for making life easier on your customers, then that is when things can get out of hand.
The Fencing Business Is Always A Two-Way Street
Fencing suppliers are working directly with clients who have cash flow issues already. In order to take on more business, the fencing supply companies have to accept the fact that their clients are going to pay late. While the fencing supply company understands the economic challenges of their client base, the company's vendors do not share those generous impulses.
Inevitably, a fencing supply company that wants to relax its credit terms to its clients will try and get help from its vendors by getting vendors to relax their terms. The reaction will vary from reducing the supply company's available credit, to eliminating the company's terms completely and asking for payments up front. It becomes the kind of a balancing act that the supply company cannot do on its own.
Supplier Factoring Is That X-Factor
When your fencing supply company works with a receivable factoring company, then you can relax your terms to your customers and still maintain the cash flow you need to keep your vendors happy. Your supplier factoring company will work with you to analyze your incoming invoices and develop the kind of cash flow you need to pay your bills on time. You will make payroll, allow your customers the breathing room they need to remain your customers and, most importantly, keep your vendors happy.
Take On Even More Business With The Help Of A Supplier Factoring Program
The services of a receivable factoring company will allow your fence supply business to even go a step further and take on new business. When you establish a working relationship with a factoring company, then you will have access to an approval system that is seamless to your clients, but critical to your success. The factoring process becomes part of the way you do business and that means that you will always have what you need to be successful.
It is always good business to help your customers as much as you can, but it can be distracting when those decisions start to affect the rest of your business. When you utilize the services of a receivable full service factor, then you will have the freedom to relax your credit terms while still maintaining a strong cash flow. Supplier factoring is the ideal way for your fencing supply company to be there for your customers and still live up to the expectations of your vendors as well.