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Staggered Receivables Vs. Cash Flow: Resolving the Equation

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 trickling in now has to go towards paying off debt, in addition to the usual expenses.

Closing the Gap

To remove the need for short-term loans and to speed up the rate of revenue after invoices are issues, businesses use accounts receivable factoring. Factoring allows businesses to convert receivables to cash within 24 hours without placing debt on the books. Businesses gain more control over cash flow with accounts receivable factoring, because they can decide which invoices or parts of invoices are factored. Factoring makes the cash flow strains of staggered receivables a thing of the past while propelling businesses toward faster growth and building capital reserves.

Get the Right Factoring Services for Your Business

New Century Financial specializes in accounts receivable factoring. Our services have no contracts, no hidden fees, and no minimums. Our team will work with you to analyze your cash flow and outstanding receivables, and create a factoring strategy to smooth out revenue cycles, build up working capital, and position your business for growth. We provide factoring services to a wide range of industries throughout the United States. Contact New Century Financial today and resolve the gap between receivables and cash flow once and for all.