Your business has excellent sales and a growing customer base, but when you look at the books, you see more money going to cover expenses and payroll than you see coming in. The realization that cash flow is reversed can be very stressful. This situation is more common than you think, and there is a simple solution to rightsize your cash flow for good.
Why Is Revenue So Low If Sales Are High?
High sales figures are great for businesses of any size. At the same time, invoices are issued with payment periods of 30, 60, or 90 days. The disparity between the sale and time it takes to receive payments from clients results in a reverse cash flow. More money is going out than coming in. While the payment periods on invoices are a standard business procedure, small businesses end up getting hit the hardest, even if they are making lots of sales. When revenue is tied up in unpaid receivables, short-term capital issues can turn into major headaches.
Improving the Parity between Sales and Revenue
To maintain a positive cash flow and achieve better parity between sales and revenue, businesses use accounts receivable factoring. Factoring services have a fast turnaround on invoices, so instead of waiting 30, 60, or even 90 days to access cash, businesses can see capital from invoices in as little as 24 hours. Factoring eliminates the lag that causes cash flow issues. Because factoring does not place any debt on the books, businesses can preserve their credit ratings and position themselves for growth quickly, instead of taking out a series of short-term loans to rightsize problems with cash flow.
Supercharge Your Cash Flow
New Century Financial provides the most comprehensive accounts receivable factoring services so you do not have to wait on customer payments or deal with cash flow issues. Our factoring services allow you to choose which invoices, or parts of invoices, are factored and you will get access to cash within 24 hours. Our team will work with you to create a factoring strategy to help correct cash flow issues and help you reach your goals without relying on debt-based loans. Contact New Century Financial today to get started.