Do you ever feel like you aren’t able to get ahead? Do you always feel like you’re struggling to stay organized? You may feel like you’re not sure what bills are due when, or you maybe you’re scratching your head wondering how to make payroll this week.

There are so many business owners out there who feel this way. All too often we’ve seen business owners struggling to figure out how to make payroll.

What business owners like you need to survive and successfully run your business is cash. Like we’ve said over and over again, CASH IS KING!

You need cash to just simply take care of the day-to-day stuff:

• Pay your vendors
• Buy inventory
• Make that all-important Friday payroll

The Cause Of Your Cash Flow Woes

As a general rule, the root cause of your cash flow woes comes back to the collection of your accounts receivable, or the lack thereof. One of the best things you to do for your business is to properly manage your receivables.

Here a few tips to help you better manage your receivables:

1. Make sure all new sales are booked as soon as possible. The quicker a sale is booked, the quicker the invoice goes out to your customer.  
2. Utilize accounting software. This allows you to keep your accounting records organized and have a better handle on your business operations.
3. Review your accounts receivables daily and contact customers that have outstanding invoices. There are many reasons customers don’t pay. Sometimes the customer just does not have the invoice -- by monitoring receivables daily you catch that problem early.  

What Else Should I Do?

Okay, so you’re really trying to turn things around and improve cash flow. Better management of your receivables is a great first step, but all the receivables management in the world isn’t going to get your customers to pay faster. You’ll still be left wondering how to supplement your cash flow.

Here’s a suggestion: payroll financing. This is also known as accounts receivable financing or factoring.

Factoring is selling the accounts receivables of your creditworthy customers to a third party, known as a factor. While advance rates vary, they are typically around 80%. Once the invoice is paid you get the remaining portion back less any applicable fees.

The Nice Thing About Factoring

The nice thing about factoring is that it bridges the gap between when an invoice is booked and when the cash is collected. You don’t have to wait 30, 60, 90 or even 120 days to collect your receivables and plan your cash flow.

Depending on the factoring company you choose, everything is done online and is virtually paperless.

Some Factoring Tips

Here are some helpful tips for factoring invoices:

• Factor all of your creditworthy receivables. 

• If you only need a little cash flow help, look at factoring just a few of your receivables from your most creditworthy customers.
• Consider ending quick pay discounts. Factoring gets the cash you need. 

If you don’t have your cash flow planned out and making payroll is difficult, then your business is suffering. Don’t let that happen to your business. Consider setting up your business with a factoring line.

Fast A/R Funding specializes in helping small businesses bridge the cash flow gap with factoring. Click below to download a report on how factoring can work for your company, or call 888.833.2286 to speak with one of our small business finance consultants.