Financial services at Xero empower small businesses and their advisors to take control of their cash flow and financial future by providing trusted insights and services. In our customer series we highlight small businesses using financial services to make their life easier.
When Johnno Green set up JCG Projects over eight years ago, he quickly turned his renovations and repairs business from a one-man operation to a team of tradies. Like his renovations, Johnno built his business on strong foundations; a solid client list, good processes and some valuable advice from his bookkeeper, Gecko Bookkeeping.
As JCG Projects grew as a business, so did the size of their customers and workload. While this was a positive step, one drawback was trying to navigate the longer payment terms of larger organisations and wait for invoices to be paid. These growing pains many small businesses face are a challenge we see for the sector and can quickly turn into stressful cash flow situations.
Johnno says: “There are currently three sectors of JCG Projects; plastery, carpentry and painting. When I started the business, the sole focus was plastering and we expanded from there to meet customer interest and demand. We started winning bigger commercial projects, which was great, and unfortunately they can take a while to come through. So while we had enough money behind us, the cash flow did start to get a bit tight.
Every time we wanted to grow the business, the jobs got bigger but getting paid took longer. And because we started to work with larger corporate companies it was taking anywhere between 30 and 90 days to get paid.
Cash flow is the biggest stress in a business. Initially we considered an overdraft or bank loan to get us by, then our bookkeeper suggested we apply for invoice finance through Xero. For us, it changed the whole concept of securing funding because we were able to only pay interest on the funds we were using.”
Invoice financing, made simple and beautiful
Waddle, from Xero, is an innovative invoice finance solution that allows businesses to access money tied up in unpaid invoices. The loan balance is repaid as customers pay their invoices and the level of available funds increases as new invoices are raised.
For Johnno and JCG Projects, invoice financing proved to be a game-changer for the business.
“We don’t always need the money, so it’s helpful that you only pay interest when you have an outstanding balance. And when we do require funds, it’s there for us and the money can be in our account the same day. It’s really good to know that we’ve got a buffer if someone’s late on a payment, if there’s some extra expenses in a job or for extra work we haven’t budgeted for. We don’t need to pull funds from other projects, and in the early days it helped to ensure our team was paid. It’s changed the whole dynamic of our finances and kept the business growing,” adds Johnno.
The seamless integration of financial services
As the business started to scale, Johnno worked with his bookkeeper to develop processes that not only benefited his business, but his customers as well.
“Customers started to ask if they could pay their deposits or accounts by credit card. We initially didn’t have facilities to process those payments, so our bookkeeper suggested we set up Stripe and add a ‘pay now’ button to our Xero invoices. This has made it easier for our customers to make secure payments.
We also integrate Xero with the Tradify app to manage our quotes. So as soon as we submit a quote through the platform, it automatically sends it to Xero and logs it all so we’re not having to manually re-enter information. It is great because the admin process is streamlined and you’re not double handling anything.”
Johnno credits the foundation of his business success to his bookkeepers.
“I would not be here without the help of my bookkeepers. They’ve helped us to set up the financial foundations we needed to grow as a business. At the end of the day, we are great on construction sites and talking to clients, but they keep us in line financially. They make sure we are following all the right rules so there are no unpleasant surprises down the track.
I know where I am standing financially every day. I know what quotes have been sent out, which invoices have been paid, and it helps me plan for my future.”
And the future is bright for JCG Projects, with large-scale projects working across service stations, hospitals and retail fit outs lined up for the rest of 2022.
Find out more about how Waddle can help your small business.