Managing Your Cash Flow with Accounts Receivable Financing

Managing Your Cash Flow with Accounts Receivable Financing

by Curt Queyrouze, President

Cash flow is the lifeblood of businesses, providing the funding that does everything from keeping the lights on to paying employees and purchasing raw materials. Business owners and financial decision-makers recognize the many problems related to cash flow disruptions, including the significant delays in payment that are common in a variety of industries. Even when your business does nothing wrong – in fact, it’s done something very right by making a sale to a client – it can still wait as long as 90 days to receive payment.

A core cash flow concern

Waiting on a client to make a payment on an invoice might feel like an unavoidable part of doing business, but it’s not always easy or even possible to plan around. If your company has a massive month of sales, it means an eventual increase in revenue. However, it can also lead to the depletion of raw materials, increased hours for staff and more stress on the production line as it spends more hours in action.

All of these issues have to be addressed at least in part by spending on overtime, materials and maintenance, and that’s where the especially difficult nature of invoice payment delays is clearly seen. Your company has sold its product or service, but doesn’t have the payment in hand, preventing you from stabilizing operations and moving forward financially. The more sales you make, the more serious the problem can become.

How can you effectively address this problem to smooth over cash flow issues and build on the positive aspects of frequent sales? The answer is accounts receivable financing.

A/R financing creates a more stable cash flow situation

What if you could get the money owed to you on unpaid invoices sooner? That’s the concept behind A/R financing, which allows your business to more quickly access the money it’s owed and put it to work in a variety of different contexts. When you enter into an A/R financing agreement with a reputable and dependable financial institution, you form a mutually beneficial bond that enables you to smooth over cash flow problems and make sure you keep employees paid, important processes running and new business coming in.

A/R financing works by providing a line of credit tied to unpaid invoices. Instead of having to wait for your clients to pay you directly, your lender will provide the funding you need on a much shorter timeline – as soon as a few days as long as you can quickly provide all the necessary information – and collect on the invoice themselves. This approach offers a number of advantages, which include but aren’t limited to better control of your cash flow situation.

Of course, getting payment for an invoice shortly after you provide the product (or service – A/R financing works for a wide range of businesses) is a major benefit with clear results. Cutting wait time on this front is a major and positive change. Outside of direct financial benefits, financing also allows you to worry less about the issues you may encounter related to fulfilling financial obligations, which means reduced stress for business leaders, accountants and the A/R team alike.

Choosing the right partner for A/R financing can also put you in a stronger position. Working with an established lender like TAB Bank means you have access to more than just quick funding for unpaid invoices. We’re proud to emphasize the relationships we build with each client. We invest a lot of our own resources into creating stable, open lines of communication and making sure a dedicated relationship manager is in place to provide personalized attention. We also offer assistance in terms of credit analysis and collections management, as well as streamlined digital banking tools to give you convenient, readily available oversight over your line of credit.

A/R financing is more than an efficient way to manage your cash flow. With TAB Bank, you can improve your overall A/R operations. To learn more, get in touch with us today.

 

Source:

https://docs.google.com/document/d/15InzAQvikLoG5HjsmiFvS7ag7HoT28psHahxKZ1IP5w/edit

https://www.tabbank.com/products/accounts-receivable-financing/

https://ca.comcapfactoring.com/resources/how-accounts-receivable-loans-improve-your-cash-flow/

The post Managing Your Cash Flow with Accounts Receivable Financing appeared first on TAB Bank.

 

About the Author

Curt Queyrouze

Prior to joining TAB Bank, Curt amassed over 30 years of commercial finance and commercial banking experience. His career has included various credit, sales, and portfolio management positions in asset-based lending, factoring, corporate banking, oil and gas finance, real estate lending, financial institutions, healthcare finance, and middle marketing lending. Previous roles include Senior Vice President/Director of Loss Mitigation for Whitney Bank where he managed the resolution of a multi-billion-dollar problem loan portfolio. He also previously served as Division Credit Executive for PNC Business Credit and as Chief Operating Officer of The Receivable Exchange, playing a critical role in the launch of this internet-based, factoring auction platform.

Curt holds a Bachelor of Science degree in Accounting from Louisiana State University. He has also taught many classes on financial analysis, cash flow analysis, loan structuring, and workout strategies. He has served in many volunteer leadership positions for non-profit organizations advocating arts and humanities and disease awareness and prevention. As President, Curt oversees all strategic, financial, credit, and operational functions of the bank.

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