Inventory management solutions: Handling inventory and suppliers with invoice financing

Your inventory is the lifeblood of your business.

But we don't need to tell you that. If you sell consumer products, you already know how important inventory management is to keeping your business flowing. Challenges come when trying to balance customer demand while maintaining the right level of inventory . Overstock and you tie up valuable capital in unsold goods. Understock and you risk missed sales opportunities and eroded customer trust.

The problem is that maintaining optimal inventory can be challenging. Fluctuating demand, unexpected market shifts, delayed customer payments, and cash flow bottlenecks can all stand in your way. The result is often an inability to restock inventory on time, causing lost sales and dissatisfied customers. But by leveraging tools like invoice financing, you can better navigate these obstacles and ensure a smooth, efficient inventory flow that can take your business to the next level.

Understanding invoice financing

Invoice financing allows you to unlock cash tied up in unpaid invoices.

By selling your invoices to a third party like us for a fee, you can get the cash you need, when you need it. You get an agreed initial percentage of the invoices as cash straight away and then get a final percentage, when your buyer settles the invoices with the third party. So you never have to wait 120 days for payment ever again. This process transforms cash flow, enabling you to manage day-to-day operations and invest in growth opportunities without the stress of waiting for delayed payments.

Essentially, there are two main types of invoice financing that are available to businesses. Known as invoice factoring and invoice discounting, both provide quick access to cash. But they each operate differently:‍

Invoice Factoring: Beneficial for businesses that prefer to outsource the management of their invoices

• Businesses sell their invoices to a finance company at a discount.
• The finance company takes over the responsibility and becomes liable for collecting unpaid invoices.

Invoice Discounting: Suitable for businesses that want to maintain responsible for the collection of unpaid invoices

• Businesses use their invoices as collateral to secure a loan from a finance company.
• The business still owns the invoice(s) and the management of them i.e. collecting payment.

Benefits of invoice financing for inventory management

Invoice financing is a powerful tool that can transform cash flow management, prevent stockouts and overstocks, and boost scalability.

Improved cashflow 

Invoice financing provides immediate access to the cash you’re owed. By converting unpaid invoices into cash, you can put it into procuring raw materials, place large orders or even deposits against inventory needs. Unlike traditional funding, you can apply in minutes, and get funded in as little as 48 hours. So you can ensure that there’s always enough cash available to restock and keep your operations running smoothly.

Avoiding stockouts and overstocks 

Invoice financing helps to avoid stockouts and overstocks by providing quicker access to the funds you are owed. This allows you to replenish inventory, fast. So essential items are always in stock. By avoiding overstocks, you can also cut the costs associated with excess inventory, like storage fees, insurance, and obsolescence. 

Flexibility and scalability  

Traditional funding can't match the pace, complexity or potential of digital businesses. But invoice financing can. It’s a solution that’s as agile as you are. Ready to provide the flexibility and scalability you need to support business growth. 

Whether it’s a viral trend that’s selling out your popular products faster than you can restock them, or the opportunity to break into a new market - invoice financing scales with your business.

Improving supplier relationships 

Invoice financing supercharges your cash flow, enabling you to pay your suppliers promptly, keep the supply chain running smoothly, and demonstrate to suppliers that your business is reliable and financially stable.

‍Benefits of Timely Payments:

• Suppliers are more likely to offer favorable terms and conditions to businesses that pay on time, including extended credit terms, bulk purchase discounts, or priority service.

• Timely payments can trigger early payment discounts, significantly reducing overall purchasing costs and releasing savings that can then be reinvested into the business to fuel further growth.

• Consistent cash flow facilitated by invoice financing helps build trust and reliability with suppliers, creating a strong foundation for long-term partnerships.

How to get started with invoice financing 

If you want to get started with invoice financing the process couldn't be simpler. At Stenn, our tech makes this quick, easy and reliable – whether you’re managing 10 invoices, or 1,000.

So how does it work? Here are some practical steps to follow:

• ‍Assess your needs: determine how much cash you require and which invoices you want to finance. Consider your current cash flow, the number of outstanding invoices, and the specific financial needs you wish to address.‍
• Research providers: look for reputable invoice financing providers like Stenn. Evaluate their terms, fees, and industry reputation. ‍
• Understand your options: decide whether invoice factoring or invoice discounting is more suitable for your business.‍
• Prepare documentation: gather the necessary documentation, including your financial statements, accounts receivable aging report, and copies of the invoices you wish to finance. This information will be required by the financing provider to assess your application.‍
• Submit your application: apply for invoice financing with your chosen provider. At Stenn, our technology makes it easy to submit all of the information that’s needed, so there’s nothing standing in the way of unblocking your cash flow. ‍
• Review terms and agreements: once your application is approved, carefully review the terms and agreements. Pay close attention to fees, payment terms, and any additional conditions.‍
• Receive funds: upon accepting the terms, the provider will advance you the agreed-upon percentage of your invoice value - with Stenn that can happen in as little as 48 hours. You can then use these funds in whichever way best benefits your business. ‍
• Manage payments: Ensure you manage the payments according to the terms agreed upon with the provider. Maintain good records of all transactions and communications with your financier.

How Stenn can assist in the process

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We offer comprehensive invoice financing services designed to support businesses manage their cash flow effectively. By choosing us as your invoice financing provider, you receive:

Expert guidance

• We provide expert guidance to help you understand the best financing options for your business. Our team will assess your needs and recommend the most suitable invoice financing arrangement.

Fast and efficient processing

• We provide a quick and straightforward application process that ensures you receive the funds you need without unnecessary delays.

Competitive rates

• We offer competitive financing rates for businesses of all sizes. Our transparent fee structure ensures there are no hidden costs.

Global reach

• Our global presence means we can support your business no matter where you operate. Whether you’re a small local business or a large international enterprise, we have the expertise and the reach to assist you.

Final thoughts

Agility is key to adjust to changing demands and unlock new opportunities. Used effectively, invoice financing can help you avoid stockouts and overstocks, reduce holding costs, enhance operational efficiency, and support business growth and expansion. Timely payments facilitated by invoice financing also foster strong relationships with suppliers, leading to better negotiating terms and potential discounts. By leveraging invoice financing, you can engineer a steadier cash flow and strengthened supplier partnerships to support your growth objectives.

Learn more about invoice financing and how Stenn can support your business growth by reading our guide: Invoice financing: everything you need to know

Discover the financing options available to help you achieve your expansion goals.

Alternatively, if you want to start your application with stenn, apply below.

Apply here.