| PUBLISHING
A Marvel-lous way to manage a demanding
payroll
 Company:
Marvel Bookbinding & Printfinishing Pty Ltd
Product: Factoring
Specific business needs
•
Payroll
•
Cashflow to support cyclical business
•
Strong banking relationship
•
Emergency cash injection
When Marvel Bookbinding & Printfinishing recently ran into cashflow
difficulties it turned to its bank for help.
However, its bank was not prepared to help it through its crisis
and, on a recommendation, Marvel switched to St.George Bank and
undertook a new factoring facility with Scottish Pacific Business
Finance.
Marvel is a company that employs 95 people and enjoys an annual
turnover of about $7 million to $8 million.
Its client base consists mainly of commercial printers who send
their "flat sheet" prints to Marvel to be trimmed, folded,
collated and bound. Typical large jobs include calendars, school
diaries and company annual reports.
Marvel’s service is highly labour-intensive, requiring the
employment of a significant number of factory floor staff. These
staff-members are all weekly wage earners.
Marvel has been in the business for about 18 years. The bulk of
its major clients have been with Marvel for a good 10 years. Nearly
all these clients enjoy payment terms of 60 to 90 days. Some are
on 30 days, but very few.
"Obviously we’d love them all to
be on 30 days", says Administration Manager Lea Robinson, "but
they are all used to the existing arrangement that has been long-established
within the printing industry, and they’re not about to start
changing their ways now."
Marvel’s
cashflow problems arise from two sources. Not only do they need
to fund a seven-day payroll while waiting anything up to three months
for payment, they also have to deal with the cyclical nature of
their major jobs.
Calendars, diaries and annual reports are only required in concentrated
lumps. This is what led Marvel to decide to manage their cashflow
through a factoring facility in the first place. But as we know,
the bank was not prepared to help it through its crisis.
"When I first started here, the company
was in very bad shape," says Leanne. "It desperately needed
to increase its existing factoring facility with the bank in order
to revive the company’s fortunes.
"The difference between our original provider and Scottish
was glaringly apparent in the area of customer service. Whereas
our previous bank didn’t want to know us, Scottish could not
have been more helpful."
Scottish
Pacific Business Finance provides Marvel with an 80 per cent facility.
Marvel sends the payroll invoices to Scottish who in turn deposits
80 per cent of their value into Marvel’s bank account. Marvel
then draws down on this facility until such time as the debtors
pay.
The facility gave Marvel the time it needed to turn the business
around and the company posted record sales and profit for October
and November 2003.
"We are extremely happy with Scottish
Pacific," says Lea.
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