Cash Flow’s Contribution To
Your Bottom Line
Your business needs positive cash flow to stay healthy and grow. Without it, you might be forced to cut expenses or be unable to pursue exciting new business opportunities when they present themselves. Accurately predict your cash flow needs and ensure the funding is there when you need it. With cash flow insights from Fast A/R Funding, your business can function efficiently and is prepared for new customer relationships.
What You Should Know About Your Cash Flow
Your expenses (account payables)
Your business has expenses. Some expenses, like your rent, are fixed, with no monthly changes. Others are variable. Payroll, for instance, is higher in busier seasons. Utilities may fluctuate depending on the temperature. You may need a major investment in materials or inventory to be ready for a busy season, to fill orders for a new customer, or to be prepared for an influx of customers responding to a daily deal program. To understand your cash flow, you need to predict your monthly expenses as accurately as possible. If you have history, allow it to guide you.
Your revenue (account receivables)
You need to know not only your sales figures but also how the credit terms you offer your customers affect your top-line revenues and bottom line cash flow. If you offer 30-, 60- or even 90-day terms, you won’t receive that revenue for one to three months after the sale is made, goods have shipped or services have been provided. Business factoring (also known as an accounts receivable loan) allows you to immediately access all that cash currently tied up in your invoices. Predict your revenue for future months realistically so you don’t end up with actual revenue that is far below what you expected, adversely affecting your short-term cash flow.
Your cash flow needs
Analyze your expenses and revenue by month to determine in advance exactly when you are going to need additional cash on hand. Now is the time to decide how to meet that cash demand. If you choose a small business loan, you need plenty of time to provide all of the requested documentation to a traditional bank, to work through the paperwork, and to wait for the loan decision. On the other hand, an accounts receivable loan through business factoring with Fast A/R Funding moves quickly. With our paperless online factoring application, you’re typically approved within 24 hours. The money may be available in as few as 48 hours, allowing you to meet increased expenses (or cover temporary revenue shortfalls) in the month they occur. Anticipating your needs reduces frustration and prepares you to meet the challenges of your business.
Learn more about the ins and outs of receivables funding and cash flow -- including the difference between cash flow and profit -- by reading “Your Guide To Cash Flow Financing.”
Check out Cash Flow University for additional resources explaining how your cash flow impacts your business and ways to improve cash flow through business factoring or accounts receivable loans.
Speak with a cash flow consultant today for personalized help in evaluating your cash flow and financing options. Or schedule a free, no-obligation demo and discover how Fast A/R Funding improves your cash flow.