Invoice Finance is a highly effective tool for small and medium sized enterprises (SMEs) to ensure they have access to sufficient working capital to grow, scale and succeed.
But for some SMEs, Invoice Finance can be an area of concern as they are unsure how to talk to their customers about their use of the facility without perceived damage to their professional relationships.
The reality is, with the right guidance, these talks can ensure you:
- Strengthen your customer relationship
- Deliver prompt and reliable service
- Demonstrate financial literacy and sustainable practice
The key is how you explain it and, in this article, we will help you do exactly that.
To find out more about Invoice Finance here at ScotPac, check out our product page today.
Invoice Finance can actually strengthen your customer relationships when it is framed as a way to offer better payment terms, deliver reliably, and grow together, rather than as a sign of financial distress. The key is how you explain it, when you introduce it, and how you keep the customer experience smooth and professional at every touchpoint.
What Is Invoice Finance and Why Are You Using It?
It is important, before approaching customers, that you understand what Invoice Finance is and understand why you are using it.
- Invoice Finance lets you unlock cash tied up in unpaid invoices
- Access money owed to you ahead of the 30, 60 or 90 days in your payment term
- Secure your finance against your accounts receivable, rather than your home or other personal assets
Invoice Finance is an increasingly common source of funding for even profitable SMEs looking to grow and better manage cash flows while they scale.
How do you talk to your customers about Invoice Finance?
The important thing to convey to your customers is that your use of Invoice Finance is a business-as-usual capital tool. It functions in a similar way operationally to a line of credit rather than as a last resort loan.
One example includes:
- “We wanted to let you know that we are partnering with a specialist financier. This means we will be able to offer you more flexible payment terms while still paying our team and suppliers on time. Instead of waiting for every invoice to be paid, we use a finance partner to access an advance on a portion of the invoice so we can keep investing in service and delivery.”
This explanation positions Invoice Finance as mutually beneficial, explains the advantage upfront and outlines how it works for transparency and clarity.
What language should you use when talking about Invoice Finance
Remember that while your interaction with clients and customers’ needs to be professional, it should also be human. Use simple, understandable language.
Use language that is:
- Customer-focused
- Emphasise stability and flexibility
- Refer to it as a standard and normal working capital tool used by many growing businesses.
- Avoid jargon and overly financial terms.
Avoid language that:
- Indicates your business needs more cash
- Implies you can’t but want to obtain a traditional business loan
- Reflects financial stress, desperation or loss of control
When you talk about Invoice Finance you can refer to it as:
- A working capital facility
- Secured or backed by invoices
- A specialist funding to support growth and reliable operations/delivery
- Partnering with a finance provider
- Allowing for the continuation of flexible and generous payment terms
Can Invoice Finance Actually Improve Customer Relationships?
Yes. If you successfully reframe the conversation around the benefits and advantages that Invoice Finance offers your customer, you can actually improve your working relationship.
Remember:
- Invoice Finance allows you to offer longer and more flexible payment terms
- Reduces pressure on clients to settle accounts early
- Ensures consistent delivery, stock levels and staffing to minimise delays and disruption to service
- Provides greater reliability in service and supplier payments
- Provides a more strategic partnership, where both businesses can plan growth with confidence.
When your customer understands that Invoice Finance actually helps their goals as well as yours, your working relationship will undoubtedly improve.
When is the best time to talk to customers about Invoice Finance?
It is best to let your customers know as early as possible. Or at least when you update trading terms.
Avoid raising it only after a problem, delayed payment or payment-related dispute.
Connecting the conversation to a contract renewal, launch of a new project or change in credit terms allows for a natural segue into the Invoice Finance facility discussion.
It can also help to frame the discussion in the context of a broader professionalisation or scaling strategy that reassures your customers.
ScotPac is here to help with all your Invoice Finance needs
Why choose ScotPac for your Invoice Finance and working capital needs?
- We support 9300+ businesses
- We fund $26.3 billion invoices annually
- We have been partnering with SMEs for over 35 years
- We are Australia’s largest non-bank lender
But more importantly, our lending specialists can help tailor a custom Invoice Finance facility for your company and your needs, and if you need assistance and guidance in having the conversation with your customers, we’re here to help too! Contact us today.
