Picture a scene where your customers can’t get enough of your products or services. You want to embrace growth and take on more projects, but there is a problem. The long payment terms set out by your customers is making cash flow very tight. You need to manage your cash flow very carefully. Here are some tips for businesses to maintain healthy cash flow and keep growing.
1. Be aware of customer payment practices
You’ll be able to manage the payment terms of your customers better if you plan. Ask questions and do research before you strike up new trading relationships. Even without long payment terms, all companies have different payment habits. Maybe your customer pays everything on the same day each month? Perhaps it’s on an ad-hoc basis, which poses different challenges. You need to know.
2. Invoice factoring can accelerate cash flow
Consider factoring your invoices. Factoring is a form of finance in which businesses use unpaid invoices as collateral for cash advances. Factoring instantly accelerates cash flow and provides immediate access to working capital. Factoring is done invoice by invoice, so no actual debt or loan is created. American Funding Solutions works with businesses every day to increase their cash flow for payroll, rent, and everyday expenses.