PLANT hire and civil construction companies operate in industries notorious for long invoice payments terms. They are often at the bottom of the food chain in terms of who gets paid.
Our client, who provided earth moving equipment, had signed a long-term contract to work on a major road project.
They issued invoices to the head contractor every week, but the head contractor was only prepared to pay 30 days after the end of the month. That meant that some invoices wouldn’t be paid for up to 60 days.
Now, the issue was that the client had a couple of guru machinery operators working for him and they needed to be paid weekly.
They were top operators, the sort of employees rival plant hire companies would love to have working for them instead.
Hence, our client did not want to lose them.
So in order to keep them loyal and happy, he needed to get his hands on cash a lot sooner than the head contractor could supply it.
When the client contacted us, it was quickly agreed OptiPay’s single invoice finance product was the solution which worked best.
One of the most attractive aspects of OptiPay’s service is a client’s ability to sell just one invoice, with no long-term commitments or contracts.
Consistent cash flow
However in this case, the client notified the road project head contractor that for the duration of the contract all invoices were assigned to us and payments should be paid into our bank account.
He put our bank details on the bottom of each invoice.
Consequently, our client would issue a weekly invoice to the head contractor which he would forward to us. Upon acknowledgement that it had been received, we advanced our client 80% of the value of the invoice. This was a quick and easy process.
Our client received the remaining 20% less our service fee when the invoice was paid by the head contractor.
It worked well and enabled the client to complete the contract.
The machinery operators, so valuable to the client’s business, enjoyed excellent pay and conditions and stayed put.
They were happy because they were paid every week and our client was happy because he enjoyed uninterrupted cash flow.
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