Cash Flow Solutions

Written by Patricia Tunstall
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Small businesses sometimes have few options when there is a cash crunch. Often, the owner does not have extensive business training in the methods available to enterprises to raise working capital and increase cash flow. The automatic response quite frequently is to cut prices or try to increase sales through discounting and other techniques. Increasing sales without having adequate working capital and cash flow, however, will soon adversely affect your financial resources.

Cash Flow Solutions through Factoring

More sales coupled with a lack of working capital and poor cash flow is called overtrading. This has a negative impact on the business, which the owner can recognize by unmistakable symptoms. There is an exaggerated emphasis on activities that will generate cash, such as offering large discounts for early cash payments.

Rather than trying to develop effective management, the underlying attitude is survival. This is in response to real problems as shown by overdrafts, partial payments to suppliers, and requests for lines of credit to meet payroll. Overtrading may be a short-term fix, but it will only lead to more serious problems in the near future.

Factoring, on the other hand, presents a relatively uncomplicated cash flow solution. When a business lacks working capital and has an erratic cash flow, accounts receivable are usually too large, overdue, or both. By selling selected invoices to a factor, a business can start on the road to financial recovery by plowing the instant cash advances into the business. This enables the company to return to good business practices that will permit competitive prices, enable timely bill paying, and restore a feeling of confidence.

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Cash flow

Cash flow is the movement of money into or out of a business, project, or financial product. By selling can be a solution.

Thank you for the post

Thanks for the post. This is a good information on cashflow game.