Cash Flow Finance Solutions for Your Business

A healthy cash flow is the lifeblood of any business, without it, your business will quickly collapse. It’s important to have the right cash flow finance solutions in place if you find that you are struggling to maintain a healthy cash flow.

In this blog post, we will discuss how to achieve a healthy cash flow for your business and additional finance options that are available, should your cash flow get difficult.

How to Achieve a Healthy Cash Flow

Cash flow is affected by many aspects of running a business, including but not limited to:

  • Sales Growth
  • Appropriate Gross Margin
  • Pricing of goods or services sold
  • Cash tied up in outstanding invoices
  • Delaying invoicing/invoicing errors
  • Operating Expenses & Staffing Costs
  • Capital Expenses
  • Debt Repayments.

Essentially it boils down to ensuring your monthly outgoings are less than your income and having adequate cash reserves in place to cover any unexpected expenses or timing issues that affect this.

To achieve the first, you need to have a good handle on your administration and the business’s financial position and know exactly what is coming in and going out each month. This can be achieved by using accounting software or by engaging the services of a suitable bookkeeper, advisor, or accountant. Once you have this information, if appropriate, you can start to look at ways to reduce your costs/increase profits. For example, if you are spending money on unnecessary advertising, spending too much on supplies or holding unnecessary stock levels then these are areas where you can start to make quick savings.

Of course, ideally, a business would have ready access to cash to overcome any short-term problems. This means having enough money set aside to cover any unexpected expenses such as a temporary drop in sales, or a slow period where cash is tight/receipts are delayed. The amount you should have in reserve will depend on the size and nature of your business and how quickly sales translate to cash in the Bank. But it takes time to build these reserves, to iron out the peaks and troughs and what do you do if you have a shortfall now?

Additional Business Finance Solutions

There are several cash flow finance solutions available that can also help you achieve a healthy cash flow. One such solution is invoice finance. Invoice finance allows you to release cash that is tied up in unpaid invoices, giving you the cash, you need to meet your day-to-day expenses. No more waiting weeks or months to get paid.

This can be a useful solution not just if you have customers who regularly pay late as even those prompt payers probably have 14 or 30-day terms, which means you can still access the cash you need to keep your business running smoothly.

Business loans are also an option, but they are not an ongoing “fix” and once you’ve had that one-off cash injection you now have another monthly expense commitment you have to make in repaying them (as a large number of businesses that took out the government support schemes are now finding), plus the criteria that businesses have to meet and the process that they have to go through is by no means easy or straightforward. Add to this the exceptionally low approval rates from the banks and additional security that may be required and it’s no wonder that business owners are looking for alternative cash flow solutions.

Partnership Invoice Finance Can Help!

If you are struggling to achieve and maintain a healthy cash flow, then entering into an invoice finance agreement may be the solution. Partnership Invoice Finance can help, not only do we provide immediate funding against your client’s invoices, but we also want to see your business expand and succeed and will take a vested interest in helping you to achieve that.

With any cash flow finance solution, it’s important to do your research and find the one that best suits your business needs. When looking into viable solutions it’s crucial that you fully investigate all the options and associated charges. With the right solution in place, you can ensure that your business has the cash it needs to meet its financial obligations and continue to grow.

Contact us today to discuss the cash flow finance solutions we have available.