Your business can be as healthy as you wish, but there is always the chance of cash flow issues as time goes. A positive cash flow is essential for keeping company operations going. The moment you have negative cash flow, it becomes harder to take care of those obligations. It is important for you to find a way out of that jam if the business is to move forward. You can for instance approach a funding company so they can help you with a service like payroll funding.
If you are curious about how this works, here is a detailed explanation of the process.
A stable cash flow is a great indicator of the status of the business. You need to work towards a positive cash flow state (more money coming in than going out of the business), if you are to meet all your financial expectations, such as paying employee salaries. Negative cash flow can be caused by so many factors. The most common one is the accounts receivables accounts. When you give your customers certain products and service and expect payment later; you tend to build more relationships with them. But if such payments delay for too long, you will have so much money tied out there with little to work with. The longer you allow them to hold off payment, the worse it may become for the business. The only silver lining in such a situation is that those accounts are an asset.
Funding companies are ready to rescue you in such a situation. They will extend you the fund necessary to meet your other obligations, such as paying the salaries. It entails you selling them your account receivable accounts, in exchange for the funding you needed. You get to access the cash you needed now, and they the follow up the payments for those accounts. They will give you a percentage of the money you expected from those accounts, and then settle the remainder the moment they manage to collect on those accounts. They take their payment from that remaining portion.
One key advantage of this service is saving you from having to wait for so long to handle your financial issues. It also allows you to continue extending the flexible payment terms to your customers, without suffering a negative cash flow. There is also your image to consider when you manage to fulfill your financial obligations in time.
The fact that you have an asset in the account receivable accounts means the money you get is not a loan. It turns out that the money you receive from the funding company is not a loan you again have to worry about paying later. You can discover more about this huge asset to your business, and other financial approaches, on this site.
We just sent you an email. Please click the link in the email to confirm your subscription!
OKSubscriptions powered by Strikingly