| What is cash flow and why is it important to my | | | | your first choice to improve cash flow. If you can |
| business? | | | | get your customers to pay on time, early or |
| Cash flow as a generic term may be used | | | | even COD that is the ultimate solution. Besides |
| differently depending on context, and certain cash | | | | getting customers to pay on time, you may also |
| flow definitions may be adapted by analysts and | | | | want to consider getting a bank line of credit. |
| accountants for their own use. For our purposes, | | | | Bank lines of credit are typically less expensive |
| cash flow is an accounting term that refers to the | | | | than a factoring line, but don't offer all of the |
| amounts of cash being received and spent by a | | | | additional features that a factoring company can |
| business during a defined period of time or | | | | provide. Banks want to get their payments on |
| sometimes tied to a specific project. Cash flow | | | | time, but don't assist you in any way in operating |
| basically means "Do I have enough cash in my | | | | your business more effectively. |
| bank account to cover my expenses?" | | | | Good factoring companies should be reviewing |
| Cash flow is king no matter what you do; it is the | | | | your accounts receivable on regular basis. You will |
| lifeblood of any business. Hopefully you're | | | | be notified when invoice are going unpaid or when |
| convinced of the importance of watching your | | | | your accounts receivable aging is starting to look |
| cash flow - but how do you keep it healthy? | | | | bad. Many factoring companies will even make |
| Make sure that your cash flow doesn't depend on | | | | calls to confirm your invoices and verify that the |
| certain invoices being paid on time. An accurate | | | | payables department of your customer has |
| cash flow projection can alert you to trouble well | | | | received the invoice and plans to pay it on time. |
| before it strikes. | | | | When you consider these benefits compared with |
| Watching your cash flow | | | | the cost of hiring a receivables clerk, the cost of |
| This is especially important in the early days of | | | | factoring doesn't look so bad. |
| your business. If you know you can stay afloat | | | | Business invoice factoring can be especially |
| when things aren't going well, then you know you'll | | | | effective when used in conjunction with a bank |
| be celebrating if the best-case scenario happens. | | | | line. Some factoring companies can work with |
| When planning the short or long-term funding | | | | your bank to give you the best of both worlds. |
| requirements of a business, it is more important | | | | Your business can have the low over all cost of |
| to forecast the likely cash requirements than to | | | | bank financing AND the flexible cash flow of a |
| project profitability, etc. Bear in mind that more | | | | business factoring line. |
| businesses fail for lack of cash flow than for want | | | | In conclusion, you should realize that many |
| of profit. | | | | profitable businesses go bust due to poor cash |
| Why should I consider opening a factoring line to | | | | flow management. Having a factoring line may be |
| improve cash flow? | | | | just what the doctor ordered. |
| Let's be honest, factoring should not always be | | | | |