Category: Getting paid

Would you use P2P Currency Exchange?

Currencies

A P2P platform simply brings together people with complementary currency exchange requirements. So if User A wants to exchange dollars for euros and User B is looking to exchange euros for dollars, they can do so over a P2P currency exchange. By harnessing the power of the crowd, users are thus able to obtain much better exchange rates than they would get through traditional currency exchange mechanisms.

CurrencyFair Ltd, for instance, claims that it can save up to 90% on international currency transfer fees. While £2,000 transferred through a typical bank could cost as much as £100 (£40 in international transfer fees and £60 in exchange rate margin), the same amount sent through CurrencyFair would only cost about £9 (a fixed £3 transfer fee plus £6 exchange rate margin). CurrencyFair charges an average of 0.35% of the amount exchanged as its margin, while TransferWise Ltd charges 0.5%.

The mechanism for P2P currency exchange is straightforward. A client opens an account with a P2P exchange and deposits money into the account. He or she then converts the money into the desired currency by “matching” with other clients on the P2P exchange. The foreign currency is then transferred to an overseas bank account nominated by the client.

Some P2P companies are controlled by FCA rules for example Midpoint and Transferwise whilst other are covered by EU rules such as Currency Fair, so you might want to check who regulates the P2P that you choose.

It can take up to 48 hours to match a deal which could be an issue in some cases.

The cost is definitely cheaper but in addition on large deals you may be able to negotiate further savings.

steve@bicknells.net

5 key questions you need to ask your FD

Profitability

As businesses grow, their needs increase. The person steering the finances needs to be someone who can take on a broad commercial role. Forecasting, IT, tax issues, insurance and back office functions – all these need to run smoothly. But a fast-growth business needs someone who can anticipate both future opportunities and potential problems.

A good financial director will help owner-managers understand which aspects of the business are the most profitable, as well as forecasting ways to exploit other opportunities. (Santander)

So what key questions should you regularly ask your FD…..

  1. What is our cash cycle and how can we improve it – Cash Cycle Blog
  2. What Key Performance Indicators should we use and what are they telling us – KPI Blog
  3. How can we improve profitability – 15 ways to improve profitability Blog
  4. What is our Business Plan and is it the right plan – Business Plan Blog
  5. Can we reduce Overheads – 10 creative ways to reduce overheads Blog

steve@bicknells.net

Would you like to borrow against a single invoice?

Close-up picture of an invoice

In August 2013, the UK Government became a Buyer of invoices on the MarketInvoice Platform, investing directly in UK SMEs looking to access working capital and grow their businesses.

Why is the Government investing funds through MarketInvoice?

The UK Government, via the Department of Business Innovation and Skills (‘BIS’) and as part of the ‘Business Finance Partnership’, has committed to using alternative finance providers to channel much needed growth funding to UK SMEs.  The scheme is investing £1.2 billion into increasing lending to small and medium sized businesses from sources other than banks.

How does it work?

Any company can use MarketInvoice provided its sells goods or services to other large businesses.

Its a ‘pay as you go’ service and you can see the estimated costs by using their calculator

Companies are vetted and the invoice must be to a large corporate not to other SME’s.

Its confidential so your customer will not know you have used MarketInvoice, if the customer doesn’t pay you will have to refund the investor.

So far £163m of invoices have been funded by MarketInvoice.

Of course it would be better if customers always paid quickly!

steve@bicknells.net

4 business models where customers fund your business

fotolia_491138_s1.jpg

Finding ways to fund your business can be a challenge so hear are some business models where your customers provide the funding.

Subscribers

This can apply to many situations ranging from Networking and Memberships to Sky TV or Microsoft Office 365, get your clients hooked on paying a monthly or periodic payments and  it should work wonders for your cash flow.

High Demand

Any product in short supply creates a situation where clients are prepared to pay now in order not to miss out, here is an example:

Microsoft unveils its new Xbox One console Friday, one week after the release of the rival PlayStation 4.

Microsoft says the supply of the new $499 consoles is its biggest ever. But with record pre-orders — more than double those of the Xbox 360 back in November 2005 — the consoles may be hard to find.

November 2013

Pay In Advance

Often used in the home improvement market for example conservatories, kitchens, bathrooms, getting customers to pay a deposit or in some cases all the money upfront (or on finance) puts you in the best possible position especially if you can set up accounts to pay your suppliers on 30 or 60 days.

Market Place

Getting paid to bring people together is a great business model think of ebay, dating sites, or any on line market place where the owner gets paid when a deal is done.

How do you fund your business?

steve@bicknells.net

 

10 ways to get paid faster

Millionaire

Late payment kills businesses, it’s a fact.

Latest research shows that British SMEs are having to wait an average of 41 days longer than their original agreed payment terms before invoices are paid. (source: BACS)

So what can you do to get paid faster?

  1. Get payment upfront – It might sound obvious but do you ask for payment with order? or deposits? or to be paid on delivery?
  2. Get Stage Payments – on projects agree stages and collect payment before you do the next stage
  3. Raise the Invoice quickly – as soon as you can bill the client send out the invoice
  4. Agree Terms of Business and Payment Terms before you start any work
  5. Make sure you know who to bill and who to chase for payment
  6. Make your invoice stand out, use bright colours and send a copy by Post and E Mail
  7. Offer multiple payment methods – Credit Card, BACS, Cheques, PayPal – make it easy for your client to pay you
  8. Offer a discount for prompt payment
  9. Charge interest for late payment
  10. Deal with any disputes quickly

steve@bicknells.net