Onyx Digital Limited - Auckland IT Services Business
Questions and Answers with Trevor Stewart
1. What was the challenge you wanted to overcome?
We provide IT services to a large corporate client, which pays their invoices on a 60-day cycle. That’s a bit of a challenge for us because we have bills to pay on the 20th of each month.
2. Why did you have this challenge?
We have just the one customer on contract, which makes us highly dependent on them for our cashflow. A big unknown is that, with any billing cycle, the client can sometimes stretch payment out to 60 or 90 days without notice. Having Interface Financial services to back us up provides us with a great sense of security.
3. What did you try to do first, before talking to Interface, to overcome this challenge?
I have some experience with factoring companies and know they can be useful. We did our research. I contacted four factoring companies and spread-sheeted the pros and cons of each. Some discount invoicing companies will charge you a substantial upfront administration fee, while others have fairly stiff percentage penalties if your client pays late. Others were expensive even if you need the money advanced by just a fortnight. Some don’t want to deal with extremely small companies.
Interface Financial came out on top in terms of fitting with our needs.
4. What did Interface do to help you overcome this challenge?
Interface Financial have a graduated percentage factor. If the debtor pays up within a fortnight of your advance, the fee is just four percent. The longer you go, for example, six weeks you pay more. I like the fact that their graduated percentage factor makes them so flexible.
5. What has been the result or outcome for your business?
Jan Wilson, who looks after us from Interface Financial, is very personable and accessible. Once my wife strikes the invoice and it is approved by our client – usually within a day or two of sending the invoice – we let Jan know and it’s all taken care of. If we find ourselves with an unexpected bill for some reason, or a tax deadline to meet, Jan will advance us what we need, with the balance paid to us on the 20th.
6. Would you recommend Interface to other people? If so, why?
I absolutely would recommend Interface Financial to others and have already done so. It may not be for everybody but it certainly works for us.