With the announcement of multiple vaccines for COVID-19, people were able to set their sights on the future, while still juggling day-to-day challenges. Businesses in particular need to form a plan to ensure they are in the best financial position possible once we start to enter the post-COVID era.
The Need for Immediate Capital
For the past year, businesses have had to adjust to pandemic guidelines. Reduced or high focused operations have forced businesses to worry about maintaining cash flow for immediate expenses, such as payroll, overhead, inventory, and supplies. Business owners are focused on maintaining cash flow for the here and now. The advent of vaccines has changed all that. Businesses now need to maintain cash flow to handle daily, weekly, and monthly expenses, as well as planning for six months or a year from now when the country isn’t facing such restrictions.
Cash Flow Planning
Despite all of the adjustments businesses have made, from moving operations online to implementing safety guidelines, the one constant that has remained is how invoices are paid. Businesses still issue invoices with staggered payment schedules of 30 days or longer. In a time when cash flow is more crucial than ever, the lag created by staggered payment schedules places a heavy strain on businesses. If businesses are waiting a month or more to receive payments from their customers, overhead costs and payroll cannot be covered, and operations can grind to a halt. Relying on short-term loans to smooth over uneven revenue cycles isn’t a viable solution, especially as lenders tighten their requirements for businesses. Staggered payment schedules also prevent businesses from accumulating capital to make plans for after the pandemic.
Overcoming Cash Flow Challenges
In order to accelerate cash flow so plans can be made for the future, businesses use accounts receivable factoring. New Century Financial offers comprehensive accounts receivable factoring services so businesses can turn their unpaid customer invoices into cash within 24 hours. Our factoring services boost cash flow so businesses can meet short term costs, such as overhead and payroll, and they can build capital reserves to get a competitive edge in the post-COVID economy that’s on the horizon. Contact New Century Financial today to get started.