Client story - SIA Samblero
SIA Samblero has operated in freight transport for 10 years, specialising in routes between Latvia and Finland.
Situation and challenge
SIA Samblero has operated in freight transport for 10 years, specialising in routes between Latvia and Finland. Over the years the company has built extensive experience in the transport business, where stable and predictable cash flow is one of the key prerequisites for success.
The challenge arose when a partner was given a 120-day invoice payment term for the service provided. For a transport company, four months is a long period: while payment for the service is awaited for several months, the company’s day-to-day expenses continue, creating a need for additional working capital.
The Scandipay solution
SIA Samblero learned about Scandipay on the recommendation of SIA AIMER. Given the long settlement term set by the partner, the company decided to use invoice financing as the solution for this particular transaction.
1. Faster cash flow: Scandipay invoice financing significantly shortened the time the company had to wait for payment. As a result, the company could use its working capital much sooner.
2. Ability to cover company expenses: SIA Samblero could direct the funds received to necessary payments and to keeping day-to-day operations running. In the freight industry this is especially important, as the costs of providing transport services arise continuously.
Result
The biggest benefit of invoice financing is predictability – the company now knows exactly when the money will be in its account. This has helped put the business relationship with its partner in order. There is no longer a need to negotiate paying invoices in instalments or on special terms. The company clearly offers its customer a payment term of 30 days or more, without worsening its own cash flow position.
“Money in the settlement account removes more stress than a nice figure in the receivables column. Although this service is of course not free, its cost is relatively small compared with the benefit of having liquidity available. Moreover, when funds are available to a company, it is often possible to take advantage of other favourable deals, so that at the end of the day the gain may be greater than the commission paid for financing the invoice.”