Credit Control Vocabulary explained

By | Credit Control, Invoice Finance | No Comments

Satago - credit control vocabulary explainedNot everyone is an accountancy guru who understands the terms that crop up in the accounting lexicon, so we thought we’d take time to provide an explanation of those most commonly used.

Credit Control vocabulary explained:

Accounts Receivable:
Payments outstanding for goods or services provided on trade credit (payment terms).

Average Debtor Days (ADD):
How many days on average your invoices are outstanding.

County Court Judgments (CCJ):
Formal court decision that a business owes a creditor money. CCJs are a drastic way of getting your money back, therefore, court action should only be taken as a last resort.

Credit Check:
A check of the creditworthiness of your existing or future clients to determine the likelihood of your clients fulfilling their financial obligations.

Credit Limit:
The maximum amount of credit that a financial institution or supplier will extend to a debtor for a particular line of credit.

Credit Rating:
An evaluation of the comparative creditworthiness of a debtor, especially a company.

Days Beyond Terms (DBT):
Indicator of how many days payments are outstanding beyond the agreed payment terms.

Invoice Factoring:
A financial transaction to accelerate the receipt of money against outstanding invoices. Businesses sell their accounts receivable to a third party at a discount. The third party then agrees the credit limits and collects the payments.

Working Capital (WC) Current Assets – Current Liabilities:
An indicator of your operational liquidity. In other words, it is the cash available for your daily operations. Working capital should always be positive as negative working capital highlights severe short-term liquidity problems.

 

Read our full whitepaper:

Credit Control 2.0: The Ultimate Guide to getting paid faster 
(including free templates, the ultimate credit control approach, and more)

About Satago

  • Satago have a different approach to invoice finance – funding invoices from when they are raised, up until when they are due (and sometimes for even longer, up until 60 days overdue). This ensures as much value of an invoice as possible stays in the pockets of SMEs, making their cash-flow more reliable, reducing the need for reliance on funding and keeping costs to a minimum.
  • In real terms, Satago will advance up to 85% of the invoice value – for a single invoice or several – immediately transferring the amount to your bank account. The fee is usually 2-4% of the invoice value financed per 30 days. The fee is dependent on a number of factors such as your credit risk and that of your customer when we buy the invoice.
  • The Satago all-in-one cash flow solution is an add-on to your existing accountancy software, and means you can be equipped with effective finance solutions to cover the funding gap – PLUS a proficient credit control strategy including a cutting-edge debtor tracking system and integrated credit risk data, to help avoid the issue of late payments overall, cutting down the time chasing payments

Why Invoice Finance is better than an Overdraft

By | Alternative to the overdraft, Invoice Finance, Press Release, Uncategorized | No Comments

Satago - Invoice Finance vs OverdraftWith research telling us that 60% of the country’s SMEs experience late payments (1), the need for businesses to be supported better is evident; not only in ways to reduce the man-hours this absorbs, but also financially, to make up the consequent shortfall in working capital and maintain cash flow.

Let’s look at the difference between the traditional Overdraft and other Invoice Finance options as support for small businesses.

The Overdraft

Many SME’s seeking financial support from their bank in the form of an overdraft, will nowadays find it more difficult due to the significant regulatory shake-up in the banking industry since the financial crisis.

More stringent capital adequacy requirements have forced banks to not only clean up their balance sheets – ending many credit lines or overdrafts with SMEs – but to become far more selective when it comes to lending. Even if issued, an overdraft will undergo regular reviews, and therefore holds the risk that it may be decreased or even withdrawn with little or no notice.

In short, the overdraft is diminishing in availability for our SMEs, even if they have strong cash flows. Even if businesses can get an overdraft, it can’t be relied upon as a long-term means of addressing working capital problems, so they need to find something else to help their businesses move forward

Invoice Finance

The term Invoice Finance suffers from negative connotations, seen by some as a last resort. Today’s suppliers, however, are offering far more affordable, flexible funding that allows businesses to improve their working capital and leverage business opportunities to the full without mortgaging their soul.

These providers offer:

  • payment upfront for your outstanding invoices
  • flexibility to invoice one or several of your invoices, not having to hand over your whole debtor book
  • ability to free up cash to pay suppliers or meet payroll demands
  • affordable costs
  • the security of bad debt protection if a customer defaults on payment or becomes insolvent
  • plus other value-added services from some, such as Satago, to help businesses improve their overall financial health

We believe the future is with these alternative providers. At Satago, we focus on providing innovative methods of managing your cash flow, not only with a unique finance solution, but with a powerful CRM software you can easily add on to your existing accountancy software to bring best practice in credit control and ultimately help you to get paid faster.

About Satago

  • Satago have a different approach to invoice finance – funding invoices from when they are raised, up until when they are due (and sometimes for even longer, up until 60 days overdue). This ensures as much value of an invoice as possible stays in the pockets of SMEs, making their cash-flow more reliable, reducing the need for reliance on funding and keeping costs to a minimum.
  • In real terms, Satago will advance up to 85% of the invoice value – for a single invoice or several – immediately transferring the amount to your bank account. The fee is usually 2-4% of the invoice value financed per 30 days. The fee is dependent on a number of factors such as your credit risk and that of your customer when we buy the invoice.
  • The Satago all-in-one cash flow solution is an add-on to your existing accountancy software, and means you can be equipped with effective finance solutions to cover the funding gap – PLUS a proficient credit control strategy including a cutting-edge debtor tracking system and integrated credit risk data, to help avoid the issue of late payments overall, cutting down the time chasing payments

Satago shortlisted for the Financial Innovation Awards

By | Invoice Finance, Press Release, Uncategorized | No Comments

The official shortlist for the Financial Innovation Awards 2016 is complete. Presented by the ifs University College and the BBA, the FIA recognises initiatives demonstrating leadership, vision and innovation within banking and financial services.

We’re delighted that Satago is shortlisted in the category of ‘Innovation in supporting business or enterprise’ for our all-in-one cash flow solution. Winners will be announced at the Awards Ceremony in London on 8 December 2016.

See Satago in the full list of finalists >>

 

Best practice in managing your debtors

By | Alternative to the overdraft, Credit Control, Invoice Finance, New Feature, Satago | No Comments

Small businesses face a challenging financial landscape. As many small businesses will know, chasing up invoice payments from your customers is a costly use of resource and can make managing your working capital difficult. Paying suppliers and meeting payroll demands can be a very real challenge. Yet still, businesses would rather improve their sales and turnover than look at their accounts receivable.

Why companies don’t pay on time

Your debtors may not pay their invoices on time for various reasons including:

  • Misunderstandings: they are confused about your payment terms
  • Incorrect assumptions: they believe they have paid but haven’t
  • Disorganisation: the accounting department is unable to stay on top of their accounts payables
  • Financial difficulties: they are struggling with their own cash-flow
  • Opportunist clients (those that use you as a risk-free zero interest loan opportunity)

A proactive credit control strategy can help

On average, SMEs spend 10 hours per week chasing customers for payments. However, in working with thousands of small businesses to help them improve their financial processes, we’ve been able to pick the brains of our credit control partners, and consolidate their recommendations on how to improve your debtor management.

This best practice for managing your debtors can be summarised as follows:

  1. Send invoices a.s.a.p. once a job is complete
  2. Ensure your invoice is accurate: better to give too much detail than too little
  3. Request your clients include your invoice numbers as references for every payment they make to help you work out which invoice has actually been paid
  4. Issue invoice reminders with proper wording and sufficient information – the first should be sent before an invoice gets to its due date
  5. Use subject lines starting with ‘Remember!’: it works!
  6. Automate what you can to take the pain out of chasing most of your debtors personally – nowadays you can leverage sophisticated technology capabilities such as an accounts receivable customer relationship management (CRM) system
  7. Know your customer – effective, thorough analysis of customer credit risk data will allow you to adapt your approach accordingly

 

Read our full Whitepaper: Credit Control 2.0: The Ultimate Guide to getting paid faster
(including free templates, explanation of key terms, and more)

 

About Satago

  • The Satago all-in-one cash-flow solution is an add-on to your existing accountancy software, and means you can be equipped with effective finance solutions to cover the funding gap – PLUS a proficient credit control strategy including a cutting-edge debtor tracking system and integrated credit risk data, to help avoid the issue of late payments overall, cutting down the time chasing payments
  • Satago have a different approach to invoice finance – funding invoices from when they are raised, up until when they are due (and sometimes for even longer, up until 60 days overdue). This ensures as much value of an invoice as possible stays in the pockets of SMEs, making their cash-flow more reliable, reducing the need for reliance on funding and keeping costs to a minimum.
  • In real terms, Satago will advance up to 85% of the invoice value – for a single invoice or several – immediately transferring the amount to your bank account. The fee is usually 2-4% of the invoice value financed per 30 days. The fee is dependent on a number of factors such as your credit risk and that of your customer when we buy the invoice.

Satago finalist in BBVA Open Talent 2016 competition

By | Press Release, Uncategorized | No Comments

BBVA finalists graphicThe official announcement of the BBVA Open Talent finalists has been released, the competition that rewards entrepreneurs in the banking and finance world.

We’re delighted that Satago has been included as one of the finalists. We will compete in the finals in London in September for the European award. Other finals will be held in Mexico and New York. In total 56 start ups from 17 different originating countries are through to this final stage with entrants focusing on payments, SaaS, big data, financial inclusion, risk analysis, identity management and fraud prevention, among other fields.

See Satago in the full list of finalists >>

What is the BBVA Open Talent Competition?

Established by the Banco Bilbao Vizcaya Argentaria (BBVA) in 2009, to discover talent, support entrepreneurs and keep transforming the banking world. They want to encourage innovation within the banking and finance ecosystem. The finals in New York, Mexico and London will each select two winners who will receive a €30,000 cash prize to develop their project with BBVA and will be invited to participate in an Immersion and Interaction Program with BBVA experts in Mexico and Madrid.

What is Invoice Finance?

By | Alternative to the overdraft, Credit Control, Invoice Finance, New Feature, Satago | No Comments

Today’s finance market for SMEs

What is Invoice Finance? From Satago - the all-in-one cash-flow management solution.

60% of UK SMEs experience late payments from their customers (1)

Following the 2008 financial crisis the reluctance of banks to fund small or risky ventures has meant that businesses now need alternative ways to support their cash-flow than the traditional overdraft or secured loan. This may be to cover short-term funding requirements, or bridge the gap between customer orders and supplier payments to help the company meet its funding obligations.

A Survey published by the British Business Bank in February 2016 show that working capital or cash-flow is the most common reason for small businesses to seek funding, so it continues to be a major challenge for SMEs. Indeed, 60% of UK SMEs experience late payments(1) and it is a significant contributing factor to the 65% of businesses that over trade and fail due to financial issues.

Research by Xero also confirmed that “small business owners are spending an average of 10% of their day – which equates to two days per month – chasing late payments, with invoices an average of 14 days overdue before being settled.”

Introducing Invoice Finance as an alternative

Invoice finance is becoming an increasingly popular alternative to the overdraft, which is becoming harder to secure and the cost of which is often higher than other sources of borrowing, particularly if a company exceeds the agreed limit.

Different types explained

You will hear about Invoice Factoring, Discounting and Financing, but what do they mean?

  • Invoice factoring is where you outsource the collection of payment to a third party, so they contact the customer on your behalf.
  • Invoice discounting is the same as Invoice Finance, where you collect the debt by yourself keeping control of the relationship you have with clients.

You will also hear about asset finance, trade finance, stock finance, even art finance, all developed to suit a specific purpose, depending on what you need the funding for. In these cases, it’s always recommended to get advice to ensure you understand the fees and interest that will be payable.

The nuts and bolts

Invoice Finance means your provider will be able to advance an amount of your invoice or entire sales ledger to you until the payment due date, for a small fee. Invoice finance enables companies to immediately release cash tied up in unpaid invoices, freeing up working capital and facilitating improved cash management capabilities.

Using Invoice Finance with success

The challenge of securing the right finance to support business growth is not a new one. The article by GrowthBusiness.co.uk shared five companies which are successfully using invoice finance to close acquisitions, satisfy big contracts and solve seasonal cash-flow issues.

 

About Satago

  • Satago has taken a new approach – funding invoices from when they are raised, up until when they are due, and sometimes even when they are overdue. This ensures as much value of an invoice as possible stays in the pockets of SMEs, making their cash-flow more reliable, reducing the need for reliance on funding and keeping costs to a minimum.
  • In real terms, Satago will advance up to 85% of the invoice value – for a single invoice or several – immediately transferring the amount to your bank account. The fee is usually 2-4% of the invoice value financed per 30 days. The fee is dependent on a number of factors such as your credit risk and that of your customer when we buy the invoice.
  • The Satago all-in-one cash-flow solution means SMEs can be equipped with effective finance solutions to cover the funding gap – and a proficient credit control strategy, with a cutting-edge debtor tracking system and integrated credit risk data, to help avoid the issue of late payments and to cut down the time chasing payments – SMEs can feel confident they are in control of their cash flow, and positioned to optimise their sales to the full.

Related articles:

Credit risk data changes

By | New Feature | No Comments

For some time now, Satago has provided credit risk data for all companies in the UK to help our users understand and manage the credit risk of their sales ledger.

AR Risk report

The risk level of a user’s Accounts Receivable

We showed this data in a few different ways within Satago. We started by showing brief, individual company pages that showed the most essential credit risk information: the credit risk categories (high, medium and low risk), the suggested credit limit and the Days Beyond Terms or DBT (i.e., when companies pay their suppliers versus agreed terms).

Then, we started to show this data “integrated” with our users’ accounts receivable (see screenshots below).  This allowed you to see, at a glance, the risk level of all outstanding invoices (what we call the AR Risk report), as well as the amount outstanding to each customer versus the suggested credit limit (the Credit Summary report).

credit report

Credit risk report showing invoiced amount vs. suggested credit limits.

Starting from today, a small number of our users will be invited to join a Beta group to preview an important new feature in Satago.  We are now offering  full credit reports on UK companies within our platform.

Whilst this feature is in beta phase, there is one important caveat to point out – we are transitioning from one credit reference agency (CRA) that supplies us with our credit risk data to another. Until now, our credit risk data has been supplied by Experian, an internationally recognised supplier of both business and consumer credit data.  In a few weeks, all our credit risk data will be supplied by Creditsafe, a UK-based business, which is actually the world’s largest supplier of company credit risk data.

During this beta phase, which we expect to last no more than a few weeks, our Beta users may find discrepancies between the full credit reports and the data shown elsewhere in Satago. This is because although the CRAs base their credit assessments on largely the same data as each other, they may calculate the risk scores and credit limits slightly differently, depending on the company.

Once we have fully transitioned to Creditsafe, please be assured that all data shown within Satago will match completely. As the largest company CRA in the world, we are confident in the robustness of Creditsafe’s risk calculations, and look forward to helping our users continue to avoid and manage credit risk, whilst improving their cashflow.

 

NEW Satago App for Nokia N-Gage

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Satago on N-Gage

With the cutting-edge LED back-light, Satago has never looked this good.

Today we are excited to announce our latest project: Satago for N-Gage.

Having investigated likely device usage trends, we’ve made our predictions for what will soon be the most highly requested app for managing your credit control on-the-go. That is, if you aren’t too busy playing one of the 50 action packed games available on the device, such as Spider-Man 2.

Our development team have been working around the clock to ensure performance is up to our usual high-standards, so there are no unnecessary delays when viewing reports, replying to customers, or financing invoices. Please note, whereas we’ve optimised performance wherever possible, data rates are still limited by the device at a maximum of 57.6 kbits/s.

Our UX designer has ensured that as there is no touch functionality available on the device, the directional pad is more than capable of effortlessly navigating our app with an average of only 5 additional presses per action.

Given the 3.4 MB internal memory, we’ve managed to keep our app down to a svelte 2.6 MB, leaving you with plenty of room for your media, such as the first minute of an MP3, or up to 5 low-resolution images.

Please let us know your thoughts once you’ve had a chance to play with our brand new app, and we’ll continue pushing the boundaries of innovation.