Small and medium-sized enterprises in Serbia have faced great challenges in recent years - from the pandemic to the war in Ukraine, things have not been easy for entrepreneurs in this area. But even now these industries are not protected from obstacles that, if they do not threaten their survival, affect their development plans. In this article, we try to review the main challenges in various industries, but also to present a digital solution that can change everything for most entrepreneurs.
Long-term payment deadlines
Businesses in most industries face a major problem when it comes to payment deadlines. It can be up to 60 days, which makes business and cash flows of companies difficult, leading to debts. When debts arise, a company`s financial health is seriously affected, resulting in unpredictable cash flows that create tension with suppliers and can hinder business continuity.
Inflation
High inflation did not bypass Serbian companies either. Although we are currently going through a mild slowdown, we still live in an economic environment where money is very expensive, which continues to confuse companies in this area.
Cash flow problems
Many wholesalers and distributors face cash flow problems due to the time lag between when they have to pay their suppliers and when they are billed for services rendered. This imbalance limits the ability of companies to invest in development, to purchase additional inventory or to cover operating costs.
Limited access to traditional financing methods
Many SMEs face the same problem that exists with most entrepreneurs in Serbia, namely the lack of access to traditional methods of financing. Small and medium-sized entrepreneurs are not seen by banks as creditworthy, because they do not have the necessary guarantees or credit history in order to get a loan from the bank.
Staff shortage
Although not a specific problem for certain industries, the labor crisis is being felt among companies in various industries. It is difficult to find suitable employees for certain jobs, and people in various industries say that there is a lack of interest on the part of employees, who are constantly demanding higher wages.
What`s the solution?
All of the above challenges can be solved or at least mitigated by digital factoring.
Digital factoring is an alternative method of financing, ideal both for small companies that are not creditworthy, and for larger companies that need quick access to money.
How does it work? A factoring company buys your invoices that you have issued to clients and which are still due for payment. The steps to follow are simple, and the money will reach your account within 24 hours at most:
2.Add a copy of the invoice you wish to fund to your account.
3.The Instant Factoring team checks the data and returns with an answer within two hours at most.
4.If everything is fine, you will get the money in 24 hours.
Benefits of digital factoring:
Improving cash flow: Factoring provides a cash boost that helps companies pay their debts, pay suppliers on time, or invest in development opportunities.
Reduced credit risk: In order for factoring to work, companies that provide this service check the creditworthiness of clients before purchasing an invoice. This reduces late payments or bad debts, thus increasing the financial stability of the company and helping to manage credit risk.
Access to working capital: Factoring provides companies with working capital without requiring guarantees or an extended credit history, which is often the case with traditional financiers.
Managing uncertainty: Factoring helps companies better manage uncertainty about the timing of invoice payments.
Digital factoring is not a magic solution for all entrepreneurs, but it definitely provides an answer to many challenges that most companies face.
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Monday, 27.11.2023.
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