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Invoice Cash - Working Capital Now for your Receivables

Guest post by: Stan Prokop

Article Overview: Information on how invoice cash, also known as factoring or invoice discounting can assist Canadian firms with working capital turnover and cash flow solutions for greater growth and profits.

Invoice Cash - Working Capital Now for your Receivables

Invoice cash - How can Canadian companies address the problem of growth and lack of working capital. The majority of any firm's liquid assets are tied up in accounts receivable. Over the years customer that paid in 30 days now take 60 or 90 days to pay your firm. This then places tremendous pressure on working capital. Thats the problem - is there a solution.

As a Canadian business owner you in fact feel that pressure every day - one business owner I know who has had his business for over 30 years says you aren't an entrepreneur until you have ' sweated a payroll ' - which of course meets rising to the challenge of meeting that key payroll requirement for your employees .

How can a Canadian business owner of financial manager determine when working capital is tightening? They are some very basic calcs you can perform. There are a number of great indicators you can monitor - here is one - it's the ' Collection Period '. Simply take your accounts receivable and divide you your average daily credit sales the longer your Collection period number is the greater attention you need to pay to working capital. Receivables are a huge component of working capital. So what if you had a solution to obtain all the working capital you needed based on current and projected sales growth?

That solution is invoice cash, or the immediate factoring or discounting of your accounts receivable. If you have no bank line with a Canadian chartered bank, by sacrificing a couple of percentage points in your gross margin, you can immediately monetize your accounts receivable.

The ' challenge ' - if we can call it that, in the Canadian marketplace is simply setting up the right invoice cash facility. We advise our clients on focusing on a ' non notification ' facility. Factoring , or invoice cash, or accounts receivable discounting, came to Canada via the U.S. and Europe , where the process has been in practice hundreds of years . Canadian business owners are less willing to turn over their accounts receivable function to a third party finance firm.

We therefore focus on non- notification solutions for clients - a financing facility where you can bill and collect your own receivables, and still get daily, weekly, or monthly advances ( It's your choice ) on your accounts receivable .

An ever better option is to marry an invoice cash facility with an inventory financing facility - you'll be able to finance your inventory also. That means only one more thing - additional cash flow and working capital.

Speak to an experienced, trusted business financing advisor on your options for Invoice Cash, also known as factoring, in Canada. Putting together the right type of facility will allow you to generate needed working capital and cash flow to run ( and grow!) your business .

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Article Tags: cash flow solutions, factoring, invoice cash, receivable financing, receivables, working capital



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