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.

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.

Act preventively

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...

Producing biogas through fermentation of agricultural waste? That is exactly what they do at Biomethane du Bois d'Arnelle, Belgium's largest production facility in Hainaut.

You can spot the three large grey domes and a cone-shaped roof from a distance in the countryside around Frasnes-lez-Gosselies. This is a biogas production unit. It took its creator and CEO, Jérôme Breton, 12 years to complete this project due to the lack of a legal and administrative framework. But today, the unit is operational, producing 70,000 MWh of energy.

Turning food waste into biomethane

"We recycle food waste and agricultural materials, livestock manure, straw, beet leaves, peelings, etc. from farmers in a 15-km radius around the site", says Jérôme Breton. "We work with 100 farmers for whom this represents additional income. In digesters, i.e., concrete tanks that are heated to 40°C, bacteria digest the material and produce biogas, consisting of 45% CO₂ and 55% CH₄ methane. We recover this biomethane through filtration, before injecting it into the natural gas distribution network. Fermented matter or digestate, a black liquid that is rich in organic matter, which is very nutritious for crops, is spread as a fertiliser in the surrounding region, where it is used to permanently store CO₂ in the soil and completely replaces chemical fertilisers."

Unrivalled performance

About 15% of the biogas is converted into electricity and heat, half of which is used for the unit’s own needs. The remaining 85% is purified and transformed into biomethane. Once it has been injected into the grid, this biomethane can be used as fuel or as a raw material for petrochemicals. It can also be used to power turbines, and the heat generated can be recovered, just like in a car engine. “While a cogeneration engine, which produces electricity and heat simultaneously, has a total efficiency of between 40 and 80%, our system allows 99.5% of the biogas produced to be injected into the grid”, the young entrepreneur explains. "The pressure varies in a distribution network. That way, the infrastructure can absorb injections without the need for additional investments to store them."

Growing to valorise

The company also grows maize, beets and cereals to valorise them as biogas: "We made a deliberate choice to grow 600 hectares of energy crops to offer farmers a complementary diversification pathway. This accounts for 30% of our raw materials. These crops are stored to allow us to 'smooth' the inflows into our digesters, which depend on agricultural and food activity, on a seasonal basis."

BNP Paribas Fortis, the only bank with such advanced skills

Jérôme Breton says the project would not have been possible without the support of BNP Paribas Fortis. "We would not have gotten funding if it wasn't for the work of their expert. It is the only bank to have such high-level skills in-house. All the other partners also benefited from the analyses and information that he provided to us! A strong, lasting relationship of trust has developed as a result. In my model, I didn't want to rely on public financing for what I do. At the same time, I wanted to produce at the right prices. We produce and sell our biomethane at 100 euros per megawatt hour, while market prices were close to 350 euros last August."

Entrepreneurial success

At BNP Paribas Fortis, we are particularly proud to be supporting passionate, inspiring entrepreneurs. Because building the entrepreneurship of the future together is also an example of Positive Banking!

Elessent EMEIA is on a mission to make the chemical industry more environmentally friendly and sustainable through innovative methods and cleaner production processes.

"We strive to create cleaner, carbon-free production processes for our customers. Innovation is at the heart of what we do", says Sara Alvarez, Finance Manager at Elessent EMEAI. "We suggest less polluting alternatives to traditional industrial methods, allowing our customers to continue to develop products that are essential to our daily lives while significantly minimising their impact on the environment, particularly in terms of pollutants and CO₂ emissions."

4 key technologies

The metals, fertiliser, chemical and refinery industries make up the majority of the company’s customers, with Elessent EMEAI able to deliver complete turnkey production sites. Tjaart Van Der Walt, Director of Elessent EMEAI: "We have four flagship technologies. The first concerns the manufacture of a compound that is widely used in industry, from fertiliser manufacturers to pigment plants, namely sulphuric acid. This is obtained by burning sulphur. We have 90 years of expertise in site design – we have delivered more than a thousand sites – and process and energy recovery. These processes will be key to producing cleaner batteries."

Increased quality and yield

The company also has alkylation technologies (a reaction that is commonly used in organic chemistry) which is used to produce high octane fuels, for more efficient engines. These compounds are valuable for the petrochemical and refinery industries. "We operate at more than 100 alkylation sites around the world", continues Van Der Walt. "And 25 hydrocarbon hydrotreating sites. This is a crucial step in the refining process, during which some elements are removed from the oil. This includes reducing sulphur and nitrogen content to improve stability. Our proprietary soft hydrocracking technology allows us to recover more value from crude oil."

In addition to these processes, which optimise the quality and yield of hydrocarbons, the company also has “wet scrubbing” technologies, which are very effective in fume treatment.

Financial support and real industry expertise

"Our business is growing on a global scale. For our international expansion, we need the constant support of our bank, BNP Paribas Fortis, which, in addition to assisting us with the financial aspects, contributes its in-depth expertise in our industry", Sara Alvarez explains. "This cooperation is crucial in Morocco, Tunisia, India and South Africa, for example. For our long-term investments in these countries, we benefit from our bank’s advice, particularly in terms of resources and guarantees of payment: secured transactions, letters of credit, etc. The same goes for hedging currency risk, which is essential in the context of volatility. This partnership allows us to continue our international expansion."

Entrepreneurial success

At BNP Paribas Fortis, we are particularly proud to be supporting passionate, inspiring entrepreneurs. Because building the entrepreneurship of the future together is also an example of Positive Banking!

Founded in 1974 in Genk, Nitto is now one of the most sustainable companies in the world. By 2045 - five years before Europe -, the company wants to become carbon neutral.

Although Nitto leads by example in terms of sustainability, the public doesn't know the company or its products. "This makes perfect sense because we operate in the B2B segment", explains Sam Strijckmans, CEO of Nitto for Europe, Middle East and Asia (EMEA). "Our products are mainly used in production processes or as part of a finished product, so there is no direct link with the end consumer. In Genk, we produce industrial adhesive tapes that are used in cars and a range of other applications. That's why we are relatively unknown."

Laptops, tablets and smartphones

But the Nitto Group's presence in our daily lives is very real. Consumer electronics account for more than 50% of its global turnover. "We produce polarising films for all electronic devices with or without touch screen: flat screens, laptops, tablets, smart watches or (foldable) smartphones.
This means that most of the major mobile phone manufacturers are Nitto customers", he says. But there's more: Nitto is also a supplier of the automotive, pharmaceutical, steel, glass, furniture and personal care industries. The Nitto range consists of more than 13,500 products for a wide range of industries.

Platinum medal

In early 2022, EcoVadis, a rating agency that assesses corporate sustainability, awarded Nitto a platinum medal. "We are one of the most sustainable companies in the world. We are very committed to the European Green Deal, a set of initiatives aimed at making the European Union climate neutral by 2050. In fact, we are even more ambitious than the EU, as our goal is to be fully carbon neutral by 2045", Sam Strijckmans says. The Nitto CEO is strongly convinced that sustainability and entrepreneurship can go hand in hand. "Our planet has enough energy, in the form of water, sun and wind, to meet all our needs. The real challenge lies in capturing, storing and distributing this energy. The only answer to this is technological innovation, something to which Nitto is contributing.”

Optimising production processes

Nitto is continuously improving its production processes to ensure that they are more environment-friendly. "The production of protective films and adhesive tapes is a good example of our approach. The glue we use is made from petroleum solvents; when it cures, these solvents evaporate. Under the new method that we adopted, the new solvents that we distil from these vapours can be re-injected into the circuit. That way, we recover 60% of the solvents we use! Soon we will achieve zero emissions, by replacing petroleum solvents with inorganic material, but we are still experimenting with this process", he adds. In terms of electricity, the Nitto EMEA Group has gone 100% green. "But we want to go one step further. The real challenge is not to buy green electricity, but to reduce our energy requirements." Nitto has also succeeded in reducing the ecological footprint of its workforce, with a green car policy and electric lease bikes. "Any company can do this", he is quick to stress.

Energy-efficient products

Developing and offering more sustainable solutions to its customers is another major challenge for Nitto. "Here's an example. On the back of many refrigerators, you still have an evaporator, which looks like a grill. Sometimes this component will ice up, activating a heating element that defrosts it. But this is a very energy-consuming process. We have developed a coating which, when applied to the evaporator, reduces the risk of icing. The heating element is thus activated less frequently, reducing energy consumption in the process. This can amount to a reduction of 165 grammes of CO₂ per day for a fridge, or 60 kilogrammes a year. This may not seem much, but if you bear in mind that there are still two million European refrigerators with evaporators, this boils down to a total reduction of 120,000 tonnes of CO₂ emissions per year", says Nitto EMEA's CEO.

Sustainability engrained in the company's DNA 

BNP Paribas Fortis has been Nitto’s financial partner for several decades. According to Sam Strijckmans, this makes perfect sense: "The bank shares our environment-friendly philosophy. Sustainability is ingrained in their DNA, and ours too. The new BNP Paribas Fortis headquarters, which are almost energy-neutral, are ample proof of this. And so is socially responsible investment (SRI), thanks to the bank's very broad range of sustainable financial products. But we also look to the bank for inspiration, for example through the organisation of seminars and panel discussions on eco-conscious leadership."

Entrepreneurial success

At BNP Paribas Fortis, we are particularly proud to be supporting passionate, inspiring entrepreneurs. Because building the entrepreneurship of the future together is also an example of Positive Banking!