Cash flow is essential to every business wanting to succeed or grow and how you get paid impacts on the prospects of your business. Invoice finance offers flexible solutions helping you better manage your cash flow and improve your monthly balance sheet.
It is well known that businesses will fail through a lack of profit in the long term, but will fail in the short term if there isn’t enough cash to pay your bills.
Cash flow is, simply, the lifeblood of your business and maintaining it is often a prerequisite of being a success.
Maintaining that cash flow means ensuring you have more money coming in than going out, and to do that you need to ensure your invoices are being paid (on time). Because without it you can’t buy new stock or pay for purchases.
Monitoring cash flow
There are plenty of tools too help your company monitor its cash flow, whether you use accountancy software or a simple excel spreadsheet. If you are aware of how and when you suffer from cash flow shortfalls you can act quicker in strengthening your position.
This means making accurate cash flow forecasts of the months ahead. By doing so you can ensure that having a firm grip on the finances of your businesses will allow you a stronger position when talking to external funding providers about additional funds when the need arises.
Speed up cash inflow
Depending on what industry you are in will affect how quickly you can take in money. If you are a service industry taking money direct from customers, then you can use limited time offers to usher in higher numbers of sales.
But, if you don’t get immediate payment from your customers, and for most manufacturing, engineering or retail businesses, this means upwrads of 30, 60 days or longer. You will need to come up with more imaginative ways in which to get paid quicker.
While invoicing can be an onerous task, it is necessary for the businesss to generate cash. Collecting money faster can help the bottom line of your end of month statement.
For slow paying industries one way of increasing your cash flow is by improving the way you invoice.
You could of course make sure your invoices are clear, sent out on time and are chased up before they are due.
Or you could get someone else to do all the hard work for you.
When a company gets into trouble because of poor cash flow, it means looking at their finance solutions, this used to be either a short-term loan or through invoice finance, where money is loaned to your business against your outstanding debtors.
Luckily, selling your invoices has evolved a lot and it’s no longer a single product offering to customers. There are now many different solutions that can be taken with Invoice Factoring, Invoice Discounting and Selective Invoice Finance.
There are many circumstances that means it isn’t necessary to commit to a long-term invoice finance arrangement like Factoring, and it can often be far more beneficial to use a short-term arrangement or a selective invoice discounting product, which can free up the cash from only selected unpaid invoices.
Sometimes the gap between finishing a job, sending out an invoice and getting paid can be too great for your business to survive, let alone thrive. It can create a problem for your cash flow, making it difficult to pay bills, pay employees, buy new equipment and stay in the black.
Invoice finance offers flexible solutions for you to fill that cash gap, releasing your cash quicker, which product is right for you is entirely your decision.
Invoice finance can help overcome short term or endemic cash flow problems. So if you are looking for an invoice finance facility to help manage or overcome your cash flow pain points then contact Access Commercial Finance today or request a call back for a free, no obligation chat with a member of our team!