Money owed or tied up in accounts receivables is worth less to your business and even creates problematic cash flow gaps, whereas your business is loosing profits or declining in value by carrying/financing your customers growth, while your business waits to be paid.
Let’s increase your business cash flow with assets that already exist (accounts receivable invoices). Keep reading and discover how making your money work for you today is worth more than money paid in the future, or simply skip to our website and get started now unlocking money tied up in your outstanding receivables!
Money is vital for any business. Without it, your business can’t grow from small operations into something bigger. To understand what your business capital is and how it really works is crucial to being a successful entrepreneur and business owner.
Outside the banking world, most business owners are not familiar with different types of capital available to bank roll business expenditures. A deeper understanding of financing and a popular financing option know as factoring will better help you manage daily and long term business finances.
Invoice Factoring – is the selling of invoices to a third party (called a factor) to improve cash flow and reduce bad debt. Receive an immediate boost to cash flow, while at the same time eliminating the need to process invoices.
Benefits of Invoice Financing (factoring)
Financial Health of your Business and Working Capital – Working capital is money you need to cover basic operating expenses in your business everyday. Expenses include payroll, inventory purchases and carrying of accounts receivable (money customers owe you).
Let’s determine how well your business is doing. We do this by finding out the working capital ratio of your business. The ratio is a good indicator of your company’s financial health and can tell you a lot about the direction your business is heading. You’ll also discover if you have enough short-term assets to pay off short-term debt you business might produce.
Rule of thumb – your current assets should be higher than your total current liabilities, which provides you with positive cash flow and positive working capital. If you are experiencing negative working capital, due to slow-pay accounts, large payroll costs, new expansion costs and/or additional accounts payable supply costs then your business may be experiencing cash flow gaps and even heading in the wrong direction.
Some ways to counteract negative cash flow and increase working capital ratio are to cut inventory, collect on outstanding or slow-paying accounts receivable invoices faster and pay bills a little more slowly.
Factoring can help your business now by collecting money owed in accounts receivables today. When you decide to factor invoices, you’ll have immediate access to more working capital and are able to focus on growing your business faster, instead of back-peddling and trying to figure out how to slow business growth or liquidate assets and supplies need during profitable cycles.
As long as your business is making more money than the cost of factoring is costing your business, then using a factor finance company’s money for a small fee is absolutely worth it. Stop financing your customers growth while your company lags due to slow paying or late paying customer accounts.
Factors are in the business of making money. They have a good deal of experience and knowledge in your industry and most likely will help your business grow even faster than you’ve experienced in the past.
It’s recommended that you get a few competitive offers when selecting a factor finance partner to work with.
Factor Bid – Compare invoice finance offers.. Free! Use www.factorbid.com to quickly and easy match your invoices with the top factor finance companies that specialize in your industry and are eager to buy your invoices for immediate cash.
Is your business on the Go? Download our financing app and get started accessing cash tied up in your receivables today!
Factor App download link for your Android Smartphone
Factor App download link for your Apple Smartphone
When Factors Compete To Buy Your Invoices, YOU WIN!
Factor Bid – Invoice Finance Offers
Source Quote Credit “A nickel ain’t worth a dime anymore”