Share

Sell your invoice to grow your business

Cape Town – Businesses battling to grow due to poor cash flows caused by slow payments on invoices have been constrained unnecessarily in South Africa, according to an invoice discounting expert.

“The invoice discounting market in South Africa is grossly under served, with the significant amount of SME and start-up businesses in the country there is still a huge gap for non-traditional and trusted ways for businesses to improve their cash flow and achieve growth,” said David Banfield, vice president of the Interface Financial Group.

In this story:

AUDIO: Banfield explains to Fin24's Matthew le Cordeur the finer details of invoice discounting.

What is invoice discounting

Banfield explains that invoice discounting is where a company buys an invoice or sets of invoices from an SME at a discount, providing them with immediate cash flow until the invoice is settled by their client.

“Another word for it is cash flow acceleration,” he told Fin24 in an interview. “What we aim to do with our invoice discounting process is to help our primarily small business clients to accelerate their cash flow.

“In a typical transaction, a manufacturer or service provider delivers their goods or they deliver their service [and] they issue their invoice and then they wait: 30, 40, 50 days in order to get paid,” he said. “What we aim to do is to enable them to grow by taking the waiting period out of the equation."

Once the invoice has been created and everything has been checked out, Interface buys that invoice. “This is not a business where we lend money,” he said. “We buy the invoice as an asset that they have and we buy that at a small discount, hence the term invoice discounting."

Interface Financial Group then owns that invoice, while their client has received instant cash, which they could use to grow their business. “We’re focused on companies that have a growth issue.”

“We carry the paper through to maturity, get paid by their customer and that’s the end of the transaction. It’s very simple, very straightforward, and from a set-up point of view from our clients, it’s a very speedy arrangement."

Listen:


You can be a part of Interface

He said that entrepreneurs now have an opportunity to be part of Interface as the company appoints its first master licensee in South Africa. “Interface, like the financial services industry of which it is a part, is a very mature player,” he said.

He explained that many of their successful licensed businesses are owned by people from all types of professions including, banking, marketing, IT, education, engineering, real estate, medical and accounting.

“What really stands out for us are licensees who have some business background, excellent communication skills, decision-making ability, and entrepreneurial spirit.”

While it helps to have some number crunching ability, it certainly is not imperative, because Interface’s detailed system and training will walk licensees through the process and procedures.

“Part of what we bring to the table is a comprehensive transaction tracking system that takes care of all of the monthly chores in terms of creating your income and expense statements and your monthly balance sheets,” said Banfield. 

“This means that you don’t need to employ staff to run your business, but tap into the established systems of the Group.”

Consider yourself an entrepreneurial hero? Or just have something on your mind? Add your voice to our Small Business Centre:

* Write a guest post
* Share a personal story

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.99
-0.3%
Rand - Pound
24.07
+0.2%
Rand - Euro
20.60
-0.0%
Rand - Aus dollar
12.36
+0.5%
Rand - Yen
0.13
+0.7%
Platinum
901.37
-0.1%
Palladium
1,000.53
-0.6%
Gold
2,153.18
-0.3%
Silver
24.93
-0.5%
Brent Crude
86.89
+1.8%
Top 40
65,876
-0.6%
All Share
72,094
-0.5%
Resource 10
53,201
-0.2%
Industrial 25
99,443
-1.0%
Financial 15
16,630
+0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders