For some industries, particularly those in hospitality, entertainment and events, summer represents the peak season of business. Long lines at amusement parks, booked hotel rooms, and filled show and concert venues help sustain the business year-round. The boom in travel also helps secondary or support businesses such as those in commercial landscaping and maintenance that thrive when those in hospitality do.
Yet for most sectors, the summer season is predictably slow with flat sales, reduced foot traffic, fewer calls, and less activity overall. Your own employees – and your clients – take time off for family vacations. And even though you know you and your employees need and deserve a break, you worry about how the summer slowdown will hurt your overall business’s revenue and growth.
Prep Your Cash Reserves with AR Factoring
Though you probably couldn’t stop the summer slowdown even if you wanted to, there are some things you can do as a business owner or manager to help sustain the business during this down period. From a financial standpoint, for instance, you can make sure you plan ahead for this mostly predictable lag when projecting your cash flow. This can help bolster your cash reserves for the slow period and make sure payroll financing is sufficient. In advance, you can take advantage of invoice factoring services or accounts receivable factoring to make sure you collect your payment faster and therefore have more cash in reserves for when the slow period hits.
With factoring accounts receivable, you can collect on your invoices in a few days instead of 30-days or more. You can use the money to bridge cash flow gaps and keep your revenue strong. Even when business decelerates, employees, overhead, and other bills still need to get paid. Payroll factoring or related business factoring services can make sure you have the money in your accounts to meet your financial obligations even when that money is temporarily coming in at drip-by-drip pace.
Factoring Services Provide Payroll Funding and More
Factoring accounts receivables isn’t a bank loan; it is simply a way to collect the money that’s already owed to you faster so that you can have money in your accounts even when sales are slow. The cost of accounts receivable factoring varies. It can range from 3 to 8 percent of the face value of the invoice, depending on the age of the receivable and more. The factoring company will work with you to secure the best rates by choosing the best invoices for financial services factoring.
So let and even encourage employees to use their vacation time this summer and don’t harbor animosity to the season for the negative financial impact it may have on your business. With proper planning and cash flow forecasting, you can make the most of the season.