Name: ProTrain
Location: New South Wales
Industry: Information Technology
"After looking into various finance providers, it was obvious that Bibby was different– it offered personalised, flexible and highly professional service with a genuine and loyal interest in our company."
A flexible cash flow solution to manage the highs and lows
The greatest lesson for ProTrain Managing Director, Steve Maddock, is that while accounts receivable can make or break a balance sheet, they may never produce profit.
Debtors may never pay, or by the time they do pay, it may be too late for a business battling to pay overheads and tax.
Steve Maddock has spent the last nine years building a computer training and technical support business for home and SME computer users.
ProTrain is also a major distributor and support service for software accessories and prepaid internet products. It supplies nationally to a several major retailers.
However business has not always been so good or reliable for Steve. In fact, until he made the decision to employ Bibby Financial Services, the business encountered serious cash flow problems.
“With almost 40% of our liquid asset base tied up in unpaid invoices, we decided we needed a system that could finance the company through the highs and lows,” Steve said.
Factoring freed management time and reduced costs
“We investigated financiers that offered invoice discounting and found that the added debt collection service offered by Bibby Financial Services was an exceptionally practical and time saving option.”
Factoring provides a flexible source of finance by allowing businesses to unlock the funds tied up in unpaid invoices – leading to an immediate injection of cash.
Businesses send a copy of their invoices to Bibby who then converts up to 85% of the unpaid invoices into cash within 24 hours. Businesses can draw down on this fund pool at an interest rate. Once the debt has fully been collected by Bibby the remaining 20%, less a fee, is transferred from Bibby to the business.
This is also referred to as discounting, though factoring offers an added service to collect payments on behalf of the business and maintain professional and detailed accounts of transactions. Bibby customers can keep track of their accounts online to view payments received and the amount of funding available via the internet.
Prior to dealing with Bibby, ProTrain had employed an accounts professional to tackle the time-consuming task of debt collection – costs for which are now saved due to the efficiencies of the factoring service.
"In effect, Bibby saved us a full time accounts receivable clerk," Steve said.
For ProTrain, the advantages of employing Bibby Financial Services are increased liquidity and professional management of its most liquid asset - debtors.
Steve believes the failure of many small businesses can be directly linked to liquidity issues - a dilemma that can be easily resolved with factoring.
A new confidence in decision making
"Factoring opens up new opportunities - Bibby has helped us better manage our business and be bold in our decision-making.”
“Without credit constraints we can take on large quantities of stock and enter into larger deals. Without factoring we would simply deny ourselves these opportunities,” he said
Steve also attributes Bibby to adding bottom line value to his business.
“Already the losses we would normally accrue from discounting invoices to encourage prompt payment far outweigh the interest and fees charged by Bibby,” he said.
“After looking into various finance providers, it was obvious that Bibby was different– it offered personalised, flexible and highly professional service with a genuine and loyal interest in our company.
"They provide my business more than money. They help manage the lifeblood of our business - our cash flow and debtors."