Less hassle, better cash flow
It's a challenge for every business: turning each order into money in the bank account as quickly as possible. It starts with properly managing invoice flows and customer payments. Rabobank's invoice services help businesses in the Netherlands get their cash flow under control.
Invoice services for business customers
'The trick for businesses is to turn an order into cash as quickly as possible', says Marco Bosma, who is responsible for business payments at Rabobank in the Netherlands. He sees a business as a kind of cycle: a business gets an order, makes costs relating to personnel, raw materials, energy, etc. and must ensure the customer pays for those costs as soon as possible. That payment then gives the business the financial scope to be able to deliver new orders.
One euro per invoice
It sounds easy enough. But the reality is different. Invoices create a lot of headaches for businesses. For example: What is an acceptable cost price for an invoice when you figure in all the related time and costs? Bosma says an invoice should not cost more than one euro to create and send by e-mail and a paper invoice should not cost more than three euros. Bosma says the costs are actually often much higher. This can really add up for what Bosma calls the '5000+', businesses that send more than 5,000 invoices a year.
Small businesses and self-employed people are less concerned about the price per invoice. But what does bother them is the amount of time it takes to create, send and manage invoices. These entrepreneurs see administrative tasks as a nuisance that distracts them from their core activity of 'running a business'.
Once an invoice has been sent, another issue arises. Bosma: 'The entrepreneur then has to decide: Do I have the strength, will and time to actively collect accounts receivable? If I really put energy into it, can I shorten the time between the invoice and payment date from 45 to 30 days? What is this worth to me as entrepreneur?'
‘If I really put energy into it, can I shorten the time between the invoice and payment date from 45 to 30 days? What is this worth to me as entrepreneur?'
'Customers asked us for solutions to these issues', says Bosma. It is hardly surprising that they turn to Rabobank given that it is one of the Netherlands’ main providers of business payment services, with millions of business payments being processed through its systems. Plus there is another link: Rabobank is one of the Netherlands' leading providers of business financing. This is why working capital businesses need for inventories and outstanding accounts payable regularly comes up when customers speak with Rabobank about investments or the growth of their businesses.
From iDeal to paper envelope
Rabobank will be able to relieve business customers of the worries associated with invoices starting in the autumn of 2015. Rabobank is working with partners to bring this about and is expanding its invoice services under the name 'Facturis'.
The basic invoice service is an online package for receiving, making, sending and managing invoices. They can be invoices from or for other Facturis users, e-mail invoices with an iDeal payment button or paper invoices sent by post. Businesses can track the status of the invoices on a dashboard. The Facturis system is linked to both the accounting package and Rabobank Internet Banking. Together with partners Facturis will also offer something similar to a collection service to ensure that invoices are actually paid. What’s more, in the near future businesses will be able to use outstanding invoices as collateral for financing their working capital, which costs less than financing without collateral.
Good for the relationship
Bosma is convinced that expanding the range of services on offer is beneficial to the relationship between the customer and Rabobank: 'We provide customers with better insight into their financial situation. This enables them to forecast their cash flow more effectively. And as a bank it gives us greater insight into the daily challenges faced by customers.'
But won’t this make customers see Rabobank as a kind of Big Brother that can watch all their financial affairs? Bosma understands why some people might think that: 'Banking is all about trust. Rabobank wants to serve as a financial partner, adviser and guide for its customers. Sharing information and vision is an integral part of that process. But this can only be done on the basis of trust, which we have to live up to every day anew. The most important thing is that customers see and are confident that we use the information to help them gain better control over their cash flow with less effort.'