With customers in 75 countries, hi-fi speaker manufacturer Monitor Audio is a truly global business.
Established 40 years ago, the Essex-based company counts the UK, US and Russia as its main markets but has distributors in destinations as diverse as Indonesia and Uruguay.
This global presence has helped the company achieve strong growth in recent years of £5.75m (30%) since 2009 and exports make up 73% of its total sales.
However, with clients spread across the globe the company is exposed to risk especially when it comes to getting paid.
“Like any international business, there are risks involved but it’s about mitigating those risks in the most effective way,” explains Finance Director Philip Evans.
“For example, through HSBC, we fully insure our biggest accounts in Russia and the US – so if our customer in either of those countries was unable to pay we would recover 90% of our funds. This gives us significant peace of mind, especially when up to US$1.5m of invoices can be outstanding at any one time in either of those countries.”
However, Monitor Audio’s day-to-day business is not about worst-case scenarios but about ensuring a steady cashflow, which it does through invoice finance and constant communication with its customers.
“Although we are in 75 export countries, we only actually have 70 customers so we can deal with them on an individual basis and have regular communication,” says Evans.
In conjunction with those customer relationships, the invoice finance facility gives Evans the confidence he needs in the company’s daily cashflow.
“Once a week we will notify all our invoices through the system and one day later 85% of those invoices will be available for draw down. A day later I’ll check my payments and the following day I’ll pay them,” he explains.
“It allows us to work in a smooth weekly cycle and ensures our cashflow is consistent.”