A healthy cash flow is vital to every aspect of your business from covering overhead expenses to making payroll, purchasing supplies, marketing, and everything in between. However, if your business issues invoices with staggered payments of 30 days or longer, the resulting uneven revenue periods can strain your cash flow, preventing successful growth and long-term success.
Invoices and the Waiting Game
The standard business practice for many businesses is to issue invoices with payment schedules ranging from 30 to 90 days. While this gives clients time to settle their accounts, the staggered payments can sync up in such a way that your business might not see a paid invoice for weeks at a time. Regardless of payment schedules, businesses still have regular overhead and variable expenses. With more money going out than coming in, a business can experience a reverse cash flow. Even a large or unexpected order from a client can place downward pressure on internal finances if a business is still waiting for payments from other clients.
Boosting Cash Flow with Faster Turnaround on Invoices
Everyone does business at a much faster rate these days, and while staggered payments schedules may seem a bit old fashioned, they aren’t going away anytime soon. To boost cash flow and get a faster turnaround on invoices, businesses use accounts receivable financing. When an invoice is generated after a sale, instead of waiting 30 days or longer, a business can submit it for accounts receivable financing. With accounts receivable financing, the invoice is converted into cash, minus a small fee, and the funds are made available within 24 hours. Accounts receivable financing eliminates the lag between client payments and allows businesses to improve cash flow.
Additional Benefits of Accounts Receivable Financing
Unlike some other forms of financing, accounts receivable financing is a debt-free funding method. Unpaid invoices are exchanged for cash, and the improved cash flow reduces the need for short-term loans. Additionally, the stabilized cash flow through a tool like accounts receivable financing allows businesses to cover regular expenses and build up capital reserves so they can position themselves for growth. Businesses spanning all industries use accounts receivable financing so they can focus on reaching their milestones instead of trying to track unpaid invoices and unsettle client accounts.
Start Improving Your Cash Flow Today
At Web Finance Direct, we offer comprehensive accounts receivable financing with flexible funding, fast turnaround on invoices, and free credit checks on your customers. Qualifying applicants will receive cash for their unpaid receivables within 24 hours with credit insurance for qualifying accounts. Contact Web Finance Direct today to get started.