How can you keep your working capital healthy while incorporating the requisite financial flexibility? Factoring helps you to finance your cash requirements in a proper, timely and suitable way.
Securing liquidity is the key to financing your working capital requirements and keeping your business running smoothly at all times. That's exactly what factoring offers.It is a structural solution for optimising working capital. In the video below (in Dutch) in less than half an hour you will gain a clear picture of what factoring has to offer.
If you prefer to watch the video in French, click here.
Factoring: a tailored structural solution
In exchange for transferring your invoices to an external factoring company, you can count on fast, flexible financing, monitor the collection of your invoices, and protect yourself against potential bankruptcy among your customers. Each factoring solution is tailored to fit the needs of your business. This includes companies operating at international level. In Belgium, one in six companies currently outsource their invoices to an external factoring company. The same trend is evident in other European countries.
Five steps to recovering your unpaid amounts
Late payments and unpaid invoices weigh heavily on a company's financial health. To manage your finances, it is essential that you put in place an effective recovery strategy, while maintaining a commercial relationship with your customers.
Take care of your invoicing upstream
The first building block of a successful recovery strategy is implementing effective invoicing. This means before starting to recover your unpaid amounts, your company must implement everything you need in order to be paid on time. Clear invoices that are complete and free of errors are a good start to persuading your customers to settle up before the payment deadline. Also think about creating general terms and conditions that 'protect' your interests, by including (reasonable) deadlines for contesting and sanctions applied in case of default of payment. Finally, your whole invoicing process needs to work together like a well-oiled machine in terms of quality, timing, terms and more.
Adapt your approach
Next, you need to have a clear view of your outstanding receivables (customers, amounts, delays, etc.). An audit will allow you to properly assess the situation. When it comes to recovery, every case is different and varies depending on your sector, your size and your position (strong or otherwise) on the market. Moreover, one customer is not the same as another and you must often adapt your strategy. Your best customer, who always pays on time, cannot be treated in the same way as a chronic late-payer or a new purchaser (and did you think about checking their solvency before starting to do business with them?). Conclusion: separate your clientele using relevant criteria to be able to act in the best way.
Your recovery strategy must include a pre-emptive phase to intervene before the amount is due. How? By sending a simple e-mail, for instance, a few days before the payment deadline. This doesn't cost you anything and it gives a clear signal that you are waiting for payment. You could even add a commercial dimension here by asking your customer if they are satisfied with the product, the sale or the service. This type of diligence will be appreciated by your debtors. Along the same lines, and although it may be more costly in terms of resources, you could add a phone call from your sales team. In this instance (and all the others, in fact), you need to oversee the coordination of your sales and administrative department.
Articulate your recovery strategy
If your customers still don't pay, in spite of these preventive actions, you need to react quickly and send your debtors a reminder. Always follow through with what you have told them so as not to lose credibility. Get there slowly but surely – and attach real significance to the form and timing of your reminder letters. In your first letter use a courteous tone, because everyone forgets at some point. What if your debtor doesn't always react? Follow up with a second and (at most) third payment demand: a registered letter, possibly sent by a lawyer for the final reminder. Be increasingly firm and send a formal notice. Try to call your customer in between each attempt (especially those who are worth the effort). This is a great way of reaching a compromise, such as by suggesting a payment schedule if your debtor has specific problems with financial management. An amicable agreement is often better than a futile (and time-consuming) battle. And what's more, this may help you to continue your commercial relationship!
Follow through... if it's worth it
Are your reminders falling on deaf ears? Have you failed to receive a valid explanation? Have you even tried to negotiate in vain? It may (unfortunately) be time to revert to a higher power and take legal action. You won't be surprised to hear that this is the most complex, costly and time-consuming way to recover your unpaid amounts. This is why not all invoices are worth this amount of effort. Properly assess the situation (the amount of the invoice, the 'position' of the customer in your portfolio, etc.). If you're thinking about taking the matter to court, you should seek the advice of a lawyer. But remember there is no guarantee that things will be simple (from simple non-payment, to dispute of the invoice or even bankruptcy of the customer).
Final words of advice
Whatever the result of your recovery efforts, make sure to keep a record of any 'accidents' in terms of your customers' late and missed payments. This kind of monitoring may prove very useful in future. And last but not least, you could even choose to manage customer risk (completely or partially, upstream or downstream) using external actors (such as a lawyer or bailiff) or companies specialised in recovery (such as BNP Paribas Fortis Factor). This is a more expensive strategy, but guarantees you greater peace of mind, as long as you choose the right provider...
Deliverect, Odoo and Abriso-Jiffy win the Private Equity Awards 2021
On 13 October, our bank and the Belgian Venture Capital & Private Equity Association put the spotlight on these companies, as they achieved remarkable growth thanks to private equity.
A number of fast-growing Belgian companies were once again honoured at this year’s Private Equity Awards. This event highlights the role that venture capital investors play in the growth of both start-up, fast-growing and mature companies. Raf Moons, Head of Private Equity at BNP Paribas Fortis, represented our bank in the jury.
The jury had the difficult task of choosing one winner from three nominated companies for each of the three categories – Venture, Growth and Buy-out.
- The ‘Venture company of the year 2021’ category focuses on young companies developing and marketing an innovative product or service with the support of a venture capital investor.
- The ‘Growth company of the year 2021’ category is for companies that expanded their business significantly through organic growth or an acquisition policy. They brought a financial partner on board without the latter aiming for control.
- The ‘Buy-out company of the year 2021’ category focuses on the transmission and growth of companies achieved by management and a private equity investor with a controlling stake.
- Venture company of the year: Deliverect
This fast-growing SaaS company connects delivery platforms with food companies around the world. To help companies manage their delivery and pick-up operations more efficiently, Deliverect integrates food ordering platforms into the cash register system, eliminating the need to re-enter orders and the costly errors that come with them. Deliverect was founded in 2018 and is headquartered in Ghent. It employs more than 200 people.
Deliverect emerged as the winner because the company has achieved enormous growth in the short term. The company is active in 38 countries and, therefore, certainly has the opportunity to become a global player within its sector. The delivery and takeout solution developed by Deliverect is crucial to the restaurant industry and became very relevant during the pandemic.
Other nominees in this category were AgomAb Therapeutics and Imcyse.
- Growth company of the year: Odoo
Odoo is a suite of open source business apps that cater to all business needs: CRM, e-commerce, accounting, inventory, point of sale, project management, etc. Odoo has more than 7 million users, located in more than 120 countries. The company has over 1,700 employees, was founded in 2004 and is headquartered in Grand-Rosière (Walloon Brabant).
For the jury, the resilience shown by the company in recent years was one of the decisive factors in selecting Odoo as the winner. A deciding factor was also the quality of its products, which are not only very modern but also very user-friendly. Finally, the company, firmly anchored in Belgium, has a large international reach with its presence all over the world.
UgenTec and Univercells were also nominated in this category.
- Buy-out company of the year: Abriso-Jiffy
Abriso-Jiffy has evolved from a local 'bubble & foam' manufacturer to a leading European group specialising in sustainable protection and insulation materials for the packaging and construction sector. The group was founded in 1985, is based in Anzegem and employs approximately 1,500 people across 15 production sites in 11 European countries.
This company was chosen by the jury because of its track record. First of all we are talking about a successful turnaround, followed by the entry of Bencis Capital, the acquisition of Jiffy and finally the very attractive exit. This journey was accomplished by a broad-based team. In addition, ESG criteria are deeply embedded in the company’s business model, making Abriso-Jiffy a true ambassador for the Private Equity Awards.
In addition to Abriso-Jiffy, Corialis and Circet Benelux were also nominated.
Didier Beauvois, Head of Corporate Banking and Member of the Executive Board of BNP Paribas Fortis:
"As co-founder of the Private Equity Awards, we have organised this event now for the fourth time. On the one hand, to highlight successful Belgian growth companies and, on the other hand, to show how private equity can help companies. Not only innovative scale-ups, but also companies that wish to make the transition to a more sustainable business model through extra investment, have a natural need for capital. This type of investment often only pays off in the longer term. That is why, as a bank, we believe it is important to assist companies with this through our private equity offering. In this way, we can make a positive contribution to the Belgian economy and to society. We are actually freeing up additional resources for this and intend to double our private equity portfolio to EUR 1 billion by 2025."
Read the full file on Private Equity in Trends-Tendances:
- Full portrait of the winners in Trends/Tendances (Dutch/French)
- Interview with R. Moons, Head Private Equity BNPP Fortis and P. Demaerel, Secretary General at BVA (Dutch/French)
- Interview with B. Peeters and Q. Masure from Tiberghien (Dutch/French)
- Interview with M. Thumas and J. Van Assche from Eight Advisory (Dutch/French)
- Interview with M. Herlant and S. Spitaels, Associaties EY Strategy and Transactions (Dutch/French)
Belgian gaming industry gets a big push
BNP Paribas Fortis Private Equity, together with Howest and Cronos, recently founded ForsVC, the first venture capital fund to focus exclusively on the Belgian gaming industry.
The gaming industry is booming all over the world. A lot of Belgian talent works on the development of computer and video games. In recent years, there has been a true explosion of creative video game start-ups in Belgium. But still, a lot of highly skilled creative people too often go abroad.
From brain drain to brain gain
As a venture capital fund for the Belgian video game industry, ForsVC wants to combat this brain drain. In the coming years, it will invest 10 to 15 million euros in gaming. Each of the three parties is bringing its specific experience and expertise. The Kortrijk college Howest as a reputable training institute. The Cronos group as a seasoned entrepreneur and investor in technology companies, including gaming studios. And the bank as a financial expert in Private Equity.
By making capital and expertise available to promising game companies, the existing ecosystem is enriched and made a lot more attractive. Belgian companies can professionalise themselves, develop high-quality games and pay competitive salaries.
Mireille Kielemoes, managing director fund investments Private Equity at BNP Paribas Fortis: “ForsVC is what we call a “university-linked” fund. This is a specific envelope within our Private Equity portfolio which, among other things, invests in university spin-offs or innovative companies whose IP (intellectual property) has a link to universities or knowledge institutions. Through these funds, we support innovation, creativity, job creation and entrepreneurship in Belgium in promising areas. For ForsVC, we’ll also be working via a participation in the game companies, but individual games are also eligible for project funding through revenue-based lending.”Press coverage dated 14/10
Which Belgian companies will win the Private Equity Awards 2021?
On 13 October, together with the Belgian Venture Capital & Private Equity Association (BVA), we will present awards to three companies supported by private equity or venture capital. Discover the candidates.
This fourth edition once again recognises successful Belgian companies that used private equity or venture capital to finance their growth. BNP Paribas Fortis is also supporting the Private Equity Awards for the fourth time as a member of the BVA. The bank will both host the event and serve on the jury.
Raf Moons, Head of Private Equity at BNP Paribas Fortis and juror: "We believe it is important to reward the growth companies in question and also highlight private equity's usefulness as a financing solution. Private equity is an excellent tool to boost the economy. For 40 years now, we have used it to offer companies opportunities at all stages of their life cycle. Besides this, BNP Paribas Fortis also supports companies that aim to use additional investments to increase their sustainability. This type of investment will only show financial returns in the longer term, which is why we wish to support them through our private equity offerings. In this way we can make a positive contribution to the Belgian economy and to society. We are actually freeing up additional resources for this and intend to double our private equity portfolio to EUR 1 billion in the next five years."
Pierre Demaerel, BVA Secretary General: "In the past few years the global private equity market has grown considerably. In Belgium, 1,400 deals amounting to over EUR 10 billion altogether were concluded in the past six years. And this trend is increasing. It involves EUR 1.5 to 2 billion annually. However, we have noticed there is a wider audience that is still insufficiently familiar with the possibilities offered by this form of financing. That is why for the fourth time, the BVA is proud to be highlighting, together with partner BNP Paribas Fortis, several Belgian companies that have exhibited remarkable growth thanks to the support of private equity or venture capital investors."
Who will follow in the footsteps of iStar Medical, Cegeka and Destiny?
The jury has nominated nine companies. There are three nominees each for the categories 'Venture Company of the Year', 'Growth Company of the Year' and 'Buy-out Company of the Year'. The jury will announce which companies they feel have achieved the steepest growth trajectory in each category on 13 October. We are pleased to introduce the nominees:
- The ‘Venture Company of the Year 2021’ category focuses on young companies developing and marketing an innovative product or service with the support of a venture capital investor.
- AgomAb Financials is a Ghent-based biotech player that develops drugs to repair damaged human tissue.
- Deliverect, also a company based in Ghent, creates software that allows restaurants to manage their online orders and integrate these into their existing cash register system.
- Imcyse is a Liege-based biopharmaceutical company that pioneers the development of a new class of immune technologies for the treatment of serious auto-immune diseases.
- The category ‘Growth Company of the Year 2021’ is for companies that expanded their business significantly through organic growth or an acquisition policy. They brought financial partners on board without the latter desiring control.
- Odoo from Ramillies in Wallonia develops open-source management software for SMEs. With over 10,000 fully integrated apps, the company offers solutions for the full automation of business processes.
- UgenTec from Hasselt develops pioneering lab software for the automation of DNA analyses, making it possible to detect respiratory infections, STIs and various types of cancer much faster.
- Charleroi-based Univercells develops technologies for the production of low-cost and large-scale vaccines. This company has won the confidence of many (inter)national investors, including the Bill & Melinda Gates Foundation.
- The category ‘Buy-out Company of the Year 2021’ focuses on the transmission and growth of companies achieved by management and a private equity investor with a controlling stake.
- Anzegem-based Abrios-Jiffy is a leading manufacturer specialising in the extrusion of sustainable, innovative, protective and insulating materials for the packaging and construction industry.
- Corialis in Lokeren designs and manufactures high-quality, technologically advanced aluminium systems for in-wall (windows, doors, sliding elements, roofing systems, curtain walling), indoor (partition walls, walls, fire protection doors) and outdoor (balustrades, greenhouses) applications.
- Esas from Wilrijk, which will be renamed Circet Benelux in future, is a service provider for the installation, maintenance and management of smart devices in sectors such as telecom and energy. The company also handles the construction and maintenance of coax, optical fibre and mobile networks for large telecom companies.