Running your own business can be highly rewarding but the commitment and effort required to make it a success can take its toll. As owner-manager you’re best placed to make the strategic decisions and secure the deals that will drive the company forward.

For many people, it’s the time-consuming administrative jobs that eat into their working day, causing them to work harder and longer. Ensuring the sales ledger is effectively managed is often cited as one of the most time-consuming and frustrating elements of running your own business.

Not all customers pay on time and some never pay at all, which can lead to serious cash flow issues. In fact, the management and administration resource tied up in ensuring a business’ invoices are paid can equate to tens of thousands of pounds over the course of a year.

‘More and more owner-managers are recognising that significant time savings can be made if they outsource this element of their operations to factoring specialists,’ says Lloyds TSB Commercial Finance.

‘In addition to boosting cash flow by immediately releasing the value tied up in the invoices, factors take full responsibility for running the sales ledger and handling collection of payments.’

Many factors can offer additional protection against the risk of non-payment of invoices and customer insolvency.

When a customer’s business fails, it usually involves joining a long line of creditors, a lot of time-consuming chasing and no guarantee that at the end of it you’ll get what’s owed to you.

Debtor protection facilities aim to ensure that payouts relating to insolvency are usually made within 30 days. Some also include a protracted default feature, where if a company fails to pay invoices, a claim can be made once the outstanding debt is over 180 days old.

These facilities can take the legwork out of spotting potential credit risk problems before they lead to a bad debt and ensure your time is not spent trying to release the capital needed for your business.