Every industry throughout the United States relies on distribution companies. Whether providing inventory and supplies to medical facilities, finished goods to e-commerce shoppers, electronic components to manufacturers, oil and gas to clients for the winter, or anything else, our economy moves based on how well distribution companies can run.
However, distribution companies need strong cash flow to keep supply chains moving, keep employees paid, and keep their inventory stocked for their clients. Unfortunately, cash flow issues are a recurring problem for distributors, but there is a simple and time-tested solution.
Cash Flow Directly Impacts How Distributors Function
Distribution companies run on a cycle. First, customers place orders with distributors. Next, the distributors fill the orders for their customers and issue invoices. Third, the customers receive their products and pay their invoices, so the distributors can restock inventory, cover overhead, pay employees, and wait for the next round of orders, which leads us back to the first step. This three-step process looks great on paper, but it operates differently in the real world.
When distribution companies issue invoices, customers have windows of 30, 60, or 90 days to make payments. During those waiting periods, distributors still need to pay employees, cover overhead, and fill orders for other customers. When more money is being spent than is coming in, cash flow becomes strained, and operations can experience severe disruptions, which can be felt throughout supply chains. Learn more about how distributors keep supply chains moving and growing their client base.
Overcoming Cash Flow Issues
Fortunately, distributors can quickly improve cash flow, overcome issues, and prevent them from happening. Distribution companies use accounts receivable factoring services to eliminate the long waiting times between issuing invoices and getting revenue. Instead of waiting a month or longer for customer payments, accounts receivable factoring converts those unpaid invoices to cash immediately: no debt, no long processing times, and no waiting to access revenue. Find out more about how accounts receivable factoring works.
Comprehensive Accounts Receivable Factoring for Distributors
We provide comprehensive accounts receivable factoring services for distribution companies across industries at New Century Financial. We will give you cash for invoices within 24 hours. We offer up to $10 million credit facilities, no long-term contracts, and let you decide which invoices or parts of invoices we factor in. Stop worrying about cash flow issues and contact New Century Financial today.
All industries rely on distributors, but distribution companies rely on cash flow to keep things moving. Find out if distribution factoring is for you and your business by learning more by reading our “Entrepreneur’s Guide to Factoring”. You can call us at 866-582-0775 or Apply Now to get started.