Cash-flow in the manufacturing industry can be particularly difficult to control. At the moment, the manufacturing industry is experiencing growth in both the UK and global markets, which in itself can put a considerable strain on cash-flow. Growing sales too quickly or receiving a single large order might sound like a dream come true, but both can create serious cash-flow problems that can threaten the very survival of your business.
The manufacturing industry also tends to be one of the first to suffer in an economic downturn. As orders are cut back, the incomes of manufacturing firms dwindle while costs will largely remain the same. Then there are the problems of late payments in the industry and payment terms that can stretch to 60, 90 and even 120 days. This makes it difficult to pay regular expenses such as rent, leases and bills from suppliers.
What’s the solution?
Manufacturing finance is one solution firms can use to regain control of their cash-flow situation. Rather than waiting for customers to pay an invoice, manufacturing finance allows businesses to release the cash tied up in an invoice as soon as it is issued. So, rather than waiting 120 days for an invoice to be paid, manufacturers can receive up to 95 percent of the value of the invoice within as little as 24 hours of it being issued.
This releases the cash-flow manufacturers need to order raw materials from suppliers, make essential payments and continue to grow the business. Compare the UK’s manufacturing finance providers at Business Expert today.