Keeping Up with Client Demand: A Cash Flow Primer

With states reopening, businesses are eagerly anticipating high demand from clients. However, rushing to meet that demand without a strategy can place finances in a precarious situation. Keeping up with demand is not just about making sales, but also maintaining cash flow to continue production and shipping.

The Pitfalls of High Client Demand

Many businesses make sales and then issue invoices with staggered payment schedules. When clients make payments on those receivables, the resulting revenue can go back into production, payroll, and overhead to keep products moving. But what happens when client demand is high but your business is still waiting 30 days or longer to receive those payments? Cash flow can stagnate or reverse, with more money going to cover expenses than is coming into the business. This can cause production to grind to a halt. Securing a short-term loan is an option, but why should businesses be penalized with debt and impacted credit ratings for their success? In order to meet client demand, businesses need to maintain a healthy cash flow so there is ample working capital on-hand to cover production, overhead, and to build reserves for growth.

Bolstering Cash Flow

If your business is anticipating increased demand, the best strategy starts with bolstering cash flow. Instead of waiting 30 days or more to receive payments from the initial round of sales, you can use factoring services. Factoring turns invoices to cash within a single day, so you can boost cash flow and have working capital on-hand to cover your expenses. Factoring is also debt-free, so you can eliminate the need for short-term loans, avoid debt, and preserve credit ratings. Factoring is the foundation of a smart strategy to get ahead of increased demand and make plans for growth.

Boost Your Cash Flow Today

Whether you want to unlock the capital that is currently tied up in unpaid receivables, or if you want to prepare for a rush of sales as the country reopens, contact the experts at Single Point Capital. As a national leader in factoring services, we provide comprehensive solutions to improve cash flow for businesses in all economic climates. Contact Single Point Capital today to get started.