We’re all familiar with the saying “an ounce of prevention is worth a pound of cure,” and though we know cerebrally it is best to try and prevent problems, it is human nature that we delay. We may ignore problems like slow cash flow and hope they will just work themselves out. After all, who has time to think about cash flow financing? You’d rather be thinking of sales, growth, new markets, new products and, well, anything besides the numbers, right?
Account Receivable Factoring Can Fix Your Cash Flow Conundrums
Ignoring the numbers is bad policy, one that could cost you your business. Fortunately, invoice factoring or receivables factoring is a way you can get large chunks of money when you need it to solve your cash flow troubles.
Oftentimes, cash flow issues go unnoticed until there’s risk of payroll not being covered – yikes. If you are in this type of situation, getting your money fast is your top priority. A factoring company can do this for you at a fair, reasonable cost. While a Cash Flow Loan may charge large interest rates with hidden fees, Account receivable financing can buy your invoices for up to 96% of their value giving you the cash you need right away. This way you can cover payroll, no questions asked.
Industry-specific Receivables Factoring
Though cash flow issues can hit any business, those in the Construction, Freight, Government, and Medical Industries tend to be hit harder, which is why construction factoring, freight factoring and government factoring might be good financing options for you to consider. These sectors tend to be seasonal, have built-in delays for receiving payment and require large equipment purchases or leases. Regardless of your field, Account receivable financing can help get your money and put you back in the red.
Get Cash Quick with Invoice Factoring and Get a Receivables Management Plan
Like getting regular oil changes and tune-ups on your car, proper financial planning and forecasting can help you avoid major cash flow troubles in the first place. A series by the Houston Chronicle that looks closely at cash flow problems suggests hiring a person to handle your cash flow if it is something you just can’t be bothered with.
An article by Entrepreneur magazine also echoes the power of planning to best manage your receivables. Also not to be overlooked is a focus on customer service by simply asking your customers to pay in cash or pay with credit early for a small discount. Just following up and reminding customers can help them pay you faster, which is your end-goal.