DJJ Precision Engineering
ABOUT DJJ PRECISION ENGINEERINGDJJ Precision Engineering are Tier 1 automotive supplier, manufacturing precision components for the likes of Ford, whilst also serving a diverse customer base covering over 70 different industries, from aerospace, medical and marine to retail, robotics and CCTV. It’s association with APL has allowed the company an important competitive advantage through flexible invoice financing from Accelerated Payments.
THEIR CHALLENGEDJJ Precision Engineering knows what it’s like to weather challenging times in the inherently challenging industry of manufacturing. The economic crash of 2008 prompted the company to diversify beyond its then focus of the automotive sector to the 70 or so wider range of industries it now serves. But one thing that has stayed true over the years is the capital-intensive nature of the precision machined components business. Single pieces of advanced manufacturing equipment alone can cost many hundreds of thousands, and with most customers insisting on at least 60 days credit on component production, it’s vital for DJJ to have a bank or other financing partner who can provide liquidity to enable access to the best machinery and even out peaks and troughs in cashflow.
“We have to fund plant, jobs, labour, materials, and then add 60 days credit for customers on dispatch of goods, so we wanted a way to improve cashflow,” explains company Director Shirley Jones. She says DJJ liked the idea of invoice financing, but the bank wasn’t an option, as it wanted to take on all the company’s invoices: what Shirley calls a “hook, line and sinker” approach that didn’t appeal to DJJ. “For bigger transactions we wanted the choice in which invoices we financed, and when. DJJ were not in a fragile state, we just wanted to improve our cashflow. What we really appreciate with Accelerated Payments is that we can decide which invoices to finance. We use the service for around eight of our larger customers for whom we have a very high turnover of business.”
- DJJ Precision Engineering selects only key customers whose invoices will be financed via Accelerated Payments
- Up to 80% of the value of each outgoing invoice is immediately available as working capital to DJJ Precision Engineering. Accelerated Payments provides the final balance payments when clients settle the invoices.
- Accelerated Payments acts in partnership with DJJ to manage customers and invoices, with DJJ taking the lead in managing debtor relationships
A POWERFUL FINANCIAL TOOL TO FUND EXPANSIONShirley says the facility from Accelerated Payments has not only freed up funds for the company to invest in more advanced manufacturing equipment, but has also allowed it to invest in customers themselves, confident it can now consider even larger contract opportunities whilst extending the credit terms required.
“I know that I can telephone APL and say that I have a potential for a very large contract, and they’ll talk to me about it – they’ve also increased the finance limits they offer on our existing customers when they have been experiencing spikes in their own order books,” she said. During the Covid crisis, DJJ received even greater orders from ‘key supplier’ industries who were pressured to meet the much increased demand caused by the pandemic, which they were able to meet in part because of invoice financing. Whilst some industries felt an immediate downturn, others in the world of robotics and the healthcare sector experienced substantial increases.
“When we heard about the invoice financing facility offered by Accelerated Payments, we never expected it to be as successful as it has been. You go into something like this with some doubt, expecting to be disappointed, but in three years there has not been one event where Accelerated Payments has let us down,” she says. “If you put what banks can offer on one side of a scale and what APL can offer on the other, there’s no comparison -- we never get to speak with the same person twice at the bank, but we have a very personal and immediate relationship with the APL team.
“We have recommended APL to everyone, including the Engineering Industries Association, as a way that companies like ours can go out, trade, and give their customers extended credit, encouraging contracts. It’s a great way to grow your business. ” Benefits for DJJ Precision Engineering at a glance
- helps the company offer extended credit terms: 60 days credit is standard among manufacturing debtors
- It receives a more personal service and a more flexible financial utility than is available from a bank
- frees up essential funds to invest in its capital-intensive precision components manufacturing business
“We have recommended APL to everyone, including the Engineering Industries Association, as a way that companies like ours can go out, trade, and give their customers extended credit, encouraging contracts. It’s a great way to grow your business. ”