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Invoice terms and conditions wording examples for Export

good afternoon everybody and welcome to today's webinar with baby financial services in which we are giving a simple guide to raising export finance using the value of an invoice my name is William Barnes Graham and I am the senior content editor at the Institute of export and insertion or trade open to export is a free online service helping small businesses karati to sell overseas for our step by step articles and guides regular webinars our export action plan tool and our quarterly competitions you can find out about all of these on our website at .export.gov a Pinto export is powered by the Institute of export and international trade the UK's professional membership body for traders endorsed by the World Trade Organization and the International Chamber of Commerce as a small business champion we offer a unique range of individual and business membership benefits education and training catering for beginners through to master's degrees and are always exciting and prestigious program of events celebrating UK businesses exporting achievements we will be a live Q&A at the end of the session and you can ask questions at any point during the webinar using the question box on the control panel to the right hand side of your screen today we are joined by a vinyl from Bibby she's head of operations and she will be talking about financial solutions for businesses who need to export so over to you Yvonne thank you very much thank everybody for joining this afternoon there indeed I'm going to talk about invoice finer as a solution before funding you're right we can go to the next slide please and maybe over one more again thank you this is what we're going to be talking about today so I will introduce to you a little bit about Billy financial services talk about the challenges exporters face and how invoice finance support that's John Jackson helped you overcome them a little but look at the export market some of our key findings from the research would take a couple of case studies and introduce you to our exporting and hopefully answer any questions as well said either as we go through the presentation or if you want to save them to the end then that fine next slide a little bit about baby financial services we're the leading independent financial partner for UK business supported by a parent company the baby line group who've been going since a 2007 you can see from here that we're involved in a range of industries retail and of course to financial services next slide so we are the leading independent financial services partner UK business importantly we support over 9,500 business customers worldwide we have more than 1,200 employees worldwide to help support this and importantly a network of 40 offices in 14 countries across the globe and what's more important particularly when looking at today's presentation we are able to fund in over 130 export destination countries we have a team of experts to keep your business moving and we fund anything from startups to nationwide to international companies and are able to offer a truly global solution to your business funding requirements next slide so now can invoice finance help your business it's ideal for businesses where customers have longer payment firms if you're already an exporter or you're going in to export you will know that more often than not your customers are looking for a payment earn that exceeds 30 days from invoice day 30 Day Shred month sometimes those customers will pay late and each of those issues on their own go towards creating cash flow gap when it comes to wanting to pay suppliers or maybe paying your staff because you're waiting longer get your invoices paid invoice finance can also help businesses who want to take on new projects and do that without taking on extra debt as a how that we do that exactly next slide please so what is invoice finance and how does it work this is a fairly simple example of an invoice finance process our clients invoice a customer or better for goods sold and the tribe will send that invoice the invoice financier perhaps I will just say at this we know that there are other invoice finances in the marketplace and hopefully all of them should be able to offer the kind of things that we're talking about today typically once an invoice is received the financier will offer up 85 percent of the value of the invoice immediately now when that invoice comes to mature the invoice finance did chase that invoice with payment or the client may opt to do that themselves we appreciate that many businesses have their own robust credit control departments and we don't want to mend anything that isn't broken so if that suits your business and you already have a credit control department in place then we'd be happy to leave that in place let our clients do their own collection when the customer debtor pays the invoice financier the amount on the invoice either directly to us or into a trust account the balance which in this example is 15% is then paid to the client we'll fund up to ten million pounds funds out and importantly when we're looking at export at the type of businesses profiles at the businesses that we will hand 100 percent export ledger funding so if you're not selling into the domestic market or if that debt is already ring fat fenced and you're comfortable with the way that you're operating your domestic business you might just want to pass over the export book particularly if it's something new for you we fund single debtor relationships looking at Newstart businesses where maybe to begin with they've only got one or two or three customers we are comfortable in providing funding a single better businesses usually against the support of something we call bed protection which I will talk about a little bit later on we're talking about speed here as well because obviously that really important though our exporters you're getting your invoices paid more quickly eighty-five percent immediately so we give you the opportunity to earn discount from suppliers that you can pay early we also offer you an expert specialist service in our credit control so when those invoices do mature we can use local language capability to take those debts very efficiently and very professionally as soon as they become due for payment we know that many businesses want to keep their funding facilities facilities discreet we understand that we can seek invoice payment on behalf of your company we can do it over the telephone or quite often apply process by credit controllers up on their own email address so that we can email your customers directly without giving any indication that in fact an invoice finance company is involved we like to keep it simple we hope it's convenient we have a raft of experience in dealing with payment terms languages we have over 13 languages in our department at the time time zones I mentioned at the beginning that we had 14 offices around the world so that's one in the UK 13 in Europe couple in Southeast Asia and we're also well represented in North America currency is also extremely important we know from all the data that we collect and this will come up several times during the presentation that exporters worry a lot about currency fluctuation and that many of them points get stung by currency irregularities maybe their invoicing on 60-day terms so on day one when they send out the invoice there I think certainly do be be if they've been voice in and overseas fancy when the money comes in the dangerous way and they're making it currency lot and we appreciate how poor important it is for companies to compete locally by invoicing in local currencies so we do what we can to help mitigate that risk local customs also very important that you understand the nuances of doing business in markets of them okay so with funding worldwide territories with our language and timezone secure support and importantly the security of bad debt protection we believe that we have this what our clients need bad debt protection if you've not come across that wording before is the same as great credit insurance many of you out there may have your own credit insurance policies we provide a bad detection solution which also covers economic and political risk cover and this enables us to fund those far reaching markets and those single customer relationships with a lot more comfort than you might otherwise find from the high thing but we shall see when we go on to the next slide please so let's just take a step back a moment and look at the challenges for exporters and maybe think about how you can tie that into an invoice finance facility but why our business is exporting we collect a lot of data both from our own clients and for from the exporting community at large through the other export organizations that we work closely through and these would be the four reasons that we come up against mostly that would be expansion looking for increased profitability because invariably you can charge more for an overseas invoice than a domestic one maybe a planned growth strategy where you've been looking at the markets that you want to get into maybe having to treat your product meet that market or looking to provide services in to other overseas markets or indeed just an unexpected order we have a lot of clients that are new to exporting that one day and it would order came across the desk and they realize perhaps that this was a good opportunity for expansion and for profitability for their business I mentioned the data that we click and that foreign currency fluctuations again and obtain the list but that's fine very closely by documentation and logistics management you think about moving goods from Birmingham to London the documentation and logistic management involved is nothing compared to what you might need to think about if you're suddenly exporting goods from the port of London to Singapore and it's about finding new customers new markets how do you do that is it through an agent distributor are you gonna have sales people on the ground going in to Charlie in the market or opening up a local office these things are expensive but one thing we do say but victory to our new exporting clients if you're starting to work with an age or the distributor you make sure that you have a contract or an agree with Greenup with them let's fit for purpose it's okay at the front end while things are going well but if you have an a verbal agreement with an agent and that relationship goes sour suddenly when you go to collect your invoices you find that an agent has been to your customers has collected the funds against invoices as they do in lieu of the commission that they think maybe they're not going to get paid or are they agreeing that customers can return goods when you have no such agreement and don't want goods to be returned unless there's a specific reason which is in ance with your terms and conditions of sale but is really important to make sure that you document any agreements that you have with representatives overseas access to cash and funding again we know that when we look at our data business is in the domestic market often a self-funding but when it comes to the overseas market they have a difficulty in finding a good partner providing them with the catch that they need extended delivery and payment terms and we know that that has a direct link to the cashflow gap and the access to funding then becomes all the more important we usually say that if you have a customer that's my happy north of the Loire Valley in France the payment terms probably going to be still 30 days from invoice date or from end of month but though anywhere below there - southern Europe go further afield - anywhere else in the rest of the world and you're looking anything from a 45 days plus in terms of when your customers will want them settle their invoices local culture and legislation really important the legal jurisdiction and local legislation under which you'll be doing business it's really something to think about you need to have terms and conditions sale which have fit for export purpose it may well be that your customers our large nationals and they only want to do business into their own contract or the terms and conditions of their own hurt disorders in which case more than likely the legal jurisdiction is going to be that of the customer and not that of the domestic market that's all well and good again whilst things are going well but if you ever have to go to arbitration or you ever need to take my customer court then all of a sudden it can become expensive and you start realizing things that perhaps you haven't thought about before if we for example say that you were going to take legal action in the United Arab Emirates all your documentation would have to be translated in their local language by an approved translator of the court even though maybe they could speak English you would have to have everything you're saying court translated again by a translator that's approved by the court you may have to stay there for several weeks incurring hotel bills accommodation and food if the case gets delayed it becomes expensive and all of these things adapted well basically coming off the bottom line of your profit so really important to think about the local legislation and the funds and conditions that you agree to do business with you're looking at exporting country risk as well political and economic risk that goes hand-in-hand with the bad debt protection that I mentioned previously not so much political risk but we do see an electric power being used from time to time if you're sending for example maybe to a business in a small island in the Caribbean and you're selling in tea not the local currency perhaps sterling or US dollars when the customer comes pay the invoice he pays in local currency an invoice in Houston who approved by the National Bank for the currency to be paid and if there is no currency available that invoice may then sit in a in a queue in the bank waiting for foreign currency become available would be a waiting period of three six nine months maybe even more if you have then the underwriter all that you get played more quickly next slide please so how can we overcome these challenges whether you're working with BFS or you're looking at other invoice finance providers you need to make sure that they provide everything that you see listed here so the one hundred percent or LED funding if you don't sell in the UK we are happy to fund your soul Ledger's I mentioned as well but if you only have one or two customers begin with we don't have a problem with our team in our export head office in Bunbury our experts they understand Incoterms they understand the nuances when you're export time zones obviously in our language capability so we're able to support our clients through the complexities of selling overseas when it comes to foreign exchange mentioned that we have our own foreign exchange business we are able to provide preferential operates as ways forward contract and it's really important that you spend some time investigating how you can mitigate currency fluctuations when you're going to invoicing currencies other than sterling and certainly at some point in time you probably will need to do that if you're going to compete well in the local market receive funding and support wherever in the world your customers are now I must add a caveat to that because obviously there are UN sanctioned a new you sanctioned market we are unable to fund our a business in terms of invoice finance is it about being able fund into those markets or open it not trading is it temple the bad debt protection very important it allows I'd like to crate confidentially knowing that a non-payment or insolvency won't fit business and again the languages and the time zones next slide please so let's have a look a little bit about the export finance market we know that there are around three hundred and twenty-two thousand exporters in the UK with twenty seven percent of them having a turnover the main sectors that we see manufacturing wholesale transport and warehousing but I do have to add to that manpower we are seeing a much increase a high it's coming to us in the oil and gas industry technical manpower maybe this is an area that perhaps previously in Scotland hang out see business was very prevalent that business has been lost somewhat and we're seeing businesses coming to us looking for funding for putting technical expert I've been to Africa into South America and into Southeast Asia we know that businesses that export are more likely to be looking for finance and have a greater ambition grow and again the biggest thing is keep repeating because they're so important the currency fluctuations and cashflow there are eight thousand two hundred export businesses currently using invoice finance so if it's a room that you pose to go down and certainly you wouldn't be alone snide please this is some of our key findings we send survey requests out to our clients regularly and those other partners sporting organizations that we work with we exchange data and we come up with what we believe is some fairly solid in fact information about export from the UK if you look at the topic for destinations if for example you want you to write another couple of countries into there and Ireland and the Netherlands would certainly be in the top five in those five countries and swap places from from 29 we know that 50 percent of the top 20 export destinations for SMEs are in the EU currently so I guess now wouldn't be a bad time to have to mention brexit we are very concerned about what's going to happen over the next couple of weeks and we are trying keep her at clients abreast of information as we receive it if you look at the bottom of the slide the last time we surveyed our clients 37 percent thought that it was a bad thing 35 percent thought there would be no change and 17 percent still felt that it was too early to tell and indeed I think the next few weeks are going to be very telling as to how brexit will work out for our exported community from the UK the top three challenges the parity fluctuations logistics Incoterms we understand that if you're new to exporting then Incoterms work that you have been used to can be fairly difficult to understand to begin with where we suppose what you have to pay for what your customers should pay for whether your insurance not paying for insurance many things to consider and the paperwork and administration there are lots of organizations that we work with and I should mention I guess now immediately open to export and Institute of export that excellent support in talking about the nuances of paperwork and registration and of course the Institute of export have some really good export knowledge courses so if you're new to exporting and you have a small team back in the office and you want to give them a good grounding in exporting then we look at the institute of export website with regards education kind of the next slide please I'm going to bring you a couple of case studies here the first one our client silent Sentinel limited they are a design and manufacture of leading surveillance and security systems they've got offices around the world in u.s. Singapore and Jordan and we structured a deal for them last year which included international payment collection and language support they found that was very important for them but they were struggling to whet their debts but there they sales outstanding was extending because they have difficult had difficulties with languages and indeed time zones when it came being paid we do understand that at the front end of any transaction and you're speaking to the owners of the business or perhaps at the buying team they may well speak English yet when it comes through the back end of the transaction and when you're trying to get paid and speaking payable Department we appreciate that they may not all speak English and then it becomes difficult and these were the kind of problems that our client was having as you can see here Paul LZ explains that exporting doesn't come without its challenges they were looking for a funder that could help them overcome some of the complexities around credit firms payment practices legal and language barriers and we have fulfilled that for our client and isn't it enabling them grow and fulfill orders that they weren't able to butoh in the past next slide please our other case study is around a pine called Raven who is in the apparel industry we have a fair few apparel client and it's no secret to me to be able to say to you that one of our clients is the business that designed and made mega Markel's wedding dress so we're providing them as we are this company the working capital funding that they need to grow to the extent that our other time believes that they will grow in the back of the have this marketing campaign that they've had from making that to the dress now this is what Annika had to say about selecting Bibby in order to take the business to the next level we needed working funding they need to do to develop new lines and they're overseas and we've given the flexibility and certain payment next slide please so I talked about a few times about the partners that we use when we're gathering information and these these are those organizations so we have the Institute of export and open export with whom we work very closely throughout yeah also the British Chamber of Commerce and the Department for international trade if you want any information on new markets that you're thinking of going into the Department for international trade for example has a good website where you can look at the various markets so we work closely with the British headquarters Association and importantly we carry out our own research now the bottom of the slide here you will see some of the publications that we have which you can download from our website last year we had a global Business Monitor we have something called the SME confidence tracker that comes out once a quarter and shares very interesting and important information about what we're being told is happening in the domestic and international marketplace and another confirm magazine that we have called Trading Places which again is full of useful information about how our product and support international trade next slide please and this is our team I think it's important for anybody to know the business that you're going to be working with Jim Davis our managing director has been with BP for over 10 years I have only been with Bibby for four and a half years but in Expo trade finance we are relationship managers so if you sign up with Bibby Financial Services very quickly after you've had your first payment your relationship manager would coming out to visit you talk about the relationship talk about our online system how you can sign invoices and make the quite a payment they will visit you as often as you need them to visit you but certainly they'll be there at least once a year and also always on the end of the telephone if you have any questions that you need answering we have a client service management team based in our office in Banbury the night service manager is there for our clients every day to talk about payments to talk about invoices that been assigned any issues at the point they have or information has been passed back to us from the customers we have a credit control team as I've mentioned with the language capability most of our credit control those speak more than one language and we're sharing about 13 languages I believe for the frontline we have a risk management team that look at the risk of client and importantly of the client customers a regional sales director and a business development sales team the support our client with the onboarding process we're a marketing team which helps get our message out into the marketplace importantly the product team that makes sure that we have the right product and that it's flexible and hopeful purpose for exporting businesses that brings me to the end of our actual presentation and I would like to invite you please do give me any questions that you think you might have or will if any questions have been past you during the presentation I'd be happy to fine on to them great yeah many thanks Yvonne for it's another greats presentation I hope everyone is found by useful for sure as a one noted we are going to open the floor for questions now so please do ask questions using the control panel on the right hand side of the screen the first question I'm going to ask is from Eddie and he's asking about how do you find out what support is available to export to certain markets and in his case he's asked about Mongolia but come aboard how do you find out what kind of specific markets information okay the Department of International trade is a good place to start but you can go on to their website you can put in the country that you're you're looking to investigate and they will bring up information regarding the local commercial office in that market maybe some of the difficulties in that market what's easy in that market the kind of product perhaps at a particular market might be looking for and whether they have any trade visits that they may have planned to a particular market so I would say that that's a good place to start that's a very specific almost slightly unusual market so if if there are inquiries from that market the things that I think it has to look and look for and again in any any new market you're looking into if it's a product that you're selling make sure that that product can be sold as it is in that market it doesn't need a mending in any way then you don't need to have any labels if its food staff or anything perishable that you've got the right certifications and we've just by going and googling maybe going into the British Chamber of Commerce or of course institute of export there are so many export support organizations out there that will help you with the information that you read the new need to get your product right for the markets that you've chosen all the markets that have chosen you great thank you Vaughn and as mentioned Vince you just have are doing business guides which are basically little snap to a guys in two different markets which you can find online on our site so I'll post a link to those afterwards I've had a question in from Irene who's from Peru and she is Asti supports companies importing into the UK as well we don't know from the UK the we can only fund companies in the UK that are registered companies in the UK so we're we have offices around the globe those offices can be assigned unfortunately we don't have representation in Peru but we have representation as I've mentioned before in North America United States and Canada Hong Kong Singapore several markets in Europe all of those individual businesses can fund companies in those markets but we cannot fund outside of those individual territories it has to be really long he has to be registered in that market okay thank you I've had a question in from Psalm is a point you brought up a few times of Honor's about currency and he says ask in January what kind of what advice would you give for companies they can to mitigate the risk of currency flux okay do you definitely you definitely need to be working with with an effort business a company that provide you with good rates perhaps give you a forward contract so that you know when you're going in exporting and you've got longer terms of payment that you have an idea of how much sterling you're going to get back if you want sterling at the end of the day but maybe in fact your invoice is in sterling and you need to pay your suppliers and can't see it then if you're having to buy currency you want to make sure that at the best rate possible if we do have an FX company and you don't have to be an invoice hainan client to actually access company so if you look at the Bibby Financial Services website and look at our foreign currency business you could get all the information that you need talk to them what we usually say is that if you've had three currency transactions that you've maybe this tunnel spot your bank if you share those funds back with us and we will have a look and we'll be able to tell you what we would what rate we would have given you and what sterling and the lady can see you would have received and you can compare that with what the actual transaction was and we find that that's a good way of measuring whether the foreign exchange service we offer is is as good as or better or not as good as what you may have at moment great thank you and the question of Sam is also us as it the same duty the same for importing as well we don't we we were on the foreign exchange side yes we can we do have a finite business as part of what we call specialist product so within us product we have invoice finance exporters we also have a trade finance or if you like a purchase finance business for companies that are importing from overseas you don't have to be importing the goods they could be good to go from the UK the UK numbers certainly we do have a trade finance facility and again details of which on our website thank you and in reference to an earlier question someone called Kevin votes in the market information question yes he's written to say that the idea of regional offices local advisors who have who or from commercial back when I can advise as well thank you for watching Kevin we've had a question in from voice check and that means just looking to kind of explain the process a little bit so he's given the example of a company who wants to buy some goods from a company and then sell them on Amazon how would be B supports his company in that situation well if his his company selling to Amazon then we do have clients that sell to Amazon and we do recognize that sometimes their contract talk terms and conditions of purchase are onerous and so sometimes we have to make reserves for things like volume discounts rebates return of goods volumes and things like that Amazon can be it can be tricky and it does depend on which Amazon you're dealing with because the terms and conditions by with are not the same for every single one piece of caution I suppose if Amazon is your main customer that sometimes unfortunately businesses get the type of contract where it can be sale of retail or return or there can be a lot of a lot of returns for whatever the reason may be so you think that you're about to get paid by Amazon you get a remittance advice it lists down half a dozen invoices and you're expecting get paid maybe I don't know ten thousand pounds we look down the bottom and you discover that actually Amazon is saying no there's too many debit notes so we're not paying you and you actually you owe us three thousand pounds now that might correct itself going forward in the next remittance advice but we do we do understand all those nuances that there are with Amazon contract they are not the easiest of companies to do business with yet at the same time that we acknowledge that effort if a client is able to get a contract with Amazon that can mean a lot of money for them so we do support as best we can yeah I think the important thing here is that you have to look at the individual contract terms and conditions that Amazon are offering to you for that product great Thank You Vaughn and I think on that note the questions are starting to dry out now so um on that Nate I think we'll wrap up thank you once again one for your welcome thank you very much so looking ahead to 2019 the Institute of exporter and international trade has just announced a series of new training courses for businesses looking to advance in exports also prepare for brexit including courses on customs declarations and procedures customs classifications and half codes rules of origin and plenty more furthermore you can apply for some government funding now towards many of our courses as of early December this funding was announced last week and is designed to support businesses who are or will be required to make customs declarations in the new in the near future obviously this would be a cheap operation for whatever breaks it may turn out to be information can be found about our training at export org dot uk' for thrush training you can read about the funding as well on our blog at as with the audio UK forward slash news we recently launched our tenth export action plan competition a great chance for SMEs in the UK to win three thousand pounds towards their export plans the competition is being sponsored by Bibby and the deadline to enter is January 25th next year information can be found on the URL stated in this slide verb and we definitely encourage you to enter that because there's a really good opportunity so please do have a look our next webinar indeed our final webinar 2018 is on December 14th and that will include some tips for companies looking to enter for competition as well as some information about the Institute's new package of support for new explosives entitled Buccaneers guide to export success we'll also be hearing from a couple of really inspiring case study exporters in the webinar so definitely recommend signing up to what is our turning out to be our annual case study webinar details can be found at open to export Cornford slash webinars and we will circulate a link to that tune in a follow up to this but finally as always please do take our exit survey to let us know what you thought of today's session and to give us any suggestions for improvements or future topics many thanks goodbye