Forums: Discussions for entrepreneurs and small business.

Here is a tip on how to improve your cash flow position... Use the not-so-well-known funding option called Factoring. Factoring is a simple buy-sell process. You sell your invoices to a factor for an agreed price and they give you a cash advance, upfront. Then when your customer pays in 30+ days you get the remaining amount of money left (minus fees.) Many businesses rely on Factoring to manage their accounts receivable. Additional benefits of factoring include, no business plan needed, approvals are based on the credit-worthiness of your customers and credit lines are unlimited. If you would like to learn more please feel free to contact me anytime!

We've designed a web service at www.billstrust.com that is aimed at optimizing cash flow for businesses. It's a bill payment system that can pay any bill a business receives, so it accepts handwritten and printed bills and requires no data entry or no need to remember due dates.

The cash flow benefit is that businesses can choose to delay payments by X number of days when they know that they are getting lump sum payments but not have to juggle all the due dates of bills in their head. It's in essence a virtual accounts payable assistant without having to actually hire one and allows the business owner more time to focus on their business rather than mundane task of bill payment.

Best part is that the business owner receives an SMS message or email when bills are paid on their due date, keeping them in the loop. They can log in to their BillsTrust account andview all their bills in one place in a forward timeline of what is due in the future so they know their full liabilities.

Hope you find this helpful.

this method is called invoice factoring and it used by many businesses to increase cash flow. A really good way to raise cash for your business especially in times such as these.

Keep in mind that factoring is not your cheapest option. It is one of the more expensive financing vehicles. Also, make sure that you know whether your arrangement with the factor is with or without recourse. While the first post indcates that you are selling the invoices, if it is with recourse and your customer does not pay the invoice, you, the seller must pay back the money to the factor.

One direction to imrove your cash flow to to look how payments (both Accounts Payable  and Receivable) are managed and timed. Here's a short article about this topic.

You can improve cash flow financing easily by optimising inventory turnovers. 

Factoring is not a decision to be taken lightly. I'd consider getting the help of an independent financial advisor before undertaking it. Once you’ve started factoring it’s quite difficult to stop. However, I’ve seen it worth quite successfully for manufacturing businesses that need to buy expensive materials to manufacture finished products.