A Cure for Cash Flow Concerns

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A Cure for Cash Flow Concerns

If youre a small or medium sized business struggling with cash flow problems you are absolutely not alone, but there are steps you can take immediately to take back control of your finances. No business, large or small, wants to have to worry about where their next dollar is coming from, especially if there are plenty of payments in the pipeline that for whatever reason havent lobbed into your account.

Having good cash flow, especially when youre starting out, should be fundamental to your business strategy. It means you can meet commitments such as paying staff and all those other bills while being able to plan for the future with some confidence. Conversely, wondering where exactly your next dollars coming from and having to constantly chase up invoices is a horrible way to have to run a business, making planning beyond a few weeks at a time almost impossible.

Yet there are ways to alleviate this type of unnecessary financial stress so you can spend your time more productively thinking about ways to grow your business. Moreover, with so much choice around in todays globalised digital world, competition for financial products and services has never been fiercer and SMBs are no longer confined to seeking help just from banks and larger financial institutions.

First and foremost, you want to get paid as quickly and painlessly as possible, so you may want to consider a secure online payment gateway for invoices such as PayPal or Stripe. Once theyre set up, your customers only need to push a few buttons to transfer funds, as opposed to the rigmarole often involved in bank transfers. These gateways are usually straightforward and user-friendly, meaning your customers are more likely to pay their invoices more quickly and painlessly when prompted.

Additionally, have state-of-the-art accounting software installed as part of your IT ecosystem will benefit you greatly in this situation as it provides a clear and accurate picture of your financial situation immediately and what customers may be causing your cash flow issues in the first place. More importantly, it should reduce the paper work required for financing options.

There are those other times, however, when your customers just cant pay you on time, for whatever reason, and you may have to endure a long and arduous wait for the money. Its during these periods where services such as invoice financing can be hugely beneficial to the smooth operation of your business. Invoice finance is a type of short-term loan issued by a lender to a business customer based on an unpaid invoice or a number of unpaid invoices. With invoice financing, you set up an account with your financial institution and, once youve sent the invoice off to a customer, you can upload it and, once approved, receive a payment of usually 90% or more of the invoice immediately. Once the money is freed up, youre free to spend it on any growth or investment plans you may have put on hold due to tight cash flow. Unlike other SMB loans, however, the invoice effectively acts as the collateral for the loan so there should be far less hassle involved with setting up the service in the first place and having to deal with things such as insurance as well because the lender is actually taking on the risk of the invoice not being paid, which is then reflected in the fee structure.

Finally, it pays to talk to an expert in the financial technology space that specialises in invoice financing, has an easy-to-understand fee structure, and can set you up as seamlessly and painlessly as possible. That way youll be well on the way to securing your ongoing cash flow, even in times of economic downturn.

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