Cash flow is important to every business, as the revenue covers overhead costs and provides a source of capital which can be used for growth projects. But with receivables on staggered payment schedules, many businesses are not getting access to revenue as quickly as they should. Fortunately, there is a way to bridge the gap between staggered receivables and cash flow.
Staggered Receivables and Cash Flow Strains
Issuing invoices with staggered payment schedules of 30, 60, or even 90 days is a standard practice. However, during that time, businesses need to make payroll, purchase supplies, advertise, and cover the cost of additional orders from other customers. Staggered receivables can end up placing a severe strain on cash flow, often pushing business owners to take out short-term loans to cover gaps in capital. These short-term loans place a further strain on cash flow, because a good portion of the revenue tri