And if the customer accounts have been the perfect answer to your cash flow financing?


A two world tale – one in which you have unlimited cash flows or one in which you have had challenges to daily cash flows that hinder your ability to develop and manage your business. A cash flow financing solution may well be the solution to all your problems.

Business owners and Canadian financial managers are facing daily on the challenges of real world cash flows. Lets you look at an example of why customer accounts can be your Holy Fund Grail of the Working Fund. Cash flow funding involves a number of different names in Canada, which is part of the confusion that we always try to do so on behalf of our client – various terms apply to this type of business financing. They include: Factoring, Invoice, Update, Financing A / R, etc. Depending on how your transaction is structured and you are dealing is really the key question, not what the funding is called.

Customers always want to know if they are candidates for this type of business financing. There are perfect candidates, so look at a profile or two so you can determine if you approach. As a general rule, you will have accounts receivable who pay regularly, but are on the slow – your bad experience of global debt has probably been quite satisfactory. Your invoice and terms statements for your customers are 30 days, but guess what, most of them seem to pay in 60 and 90 days – which certainly seems to be the trend of customers we are talking about.

Does the number of sizes involve cash flow financing, it really does not refer to general terms if you have at least $ 50,000 bills a month, you are a candidate for customer account financing. The reality is that companies with several million dollars in receivables also use this form of funding.

We are hurried to say that in most cases, the size of your installation will affect your overall pricing. In our experience, you can potentially reduce the cost of your financing institution for your accounting of nearly 1% per month if you have a large installation. However, we spend many hours and many meetings educating Canadian companies on factoring pricing, which is roughly understood by most clients who examine this type of business financing.

So the end result is that you should not leave the size of your business, nor any other challenges you may face – (temporary financial losses, restructuring, etc.) Influence your ability to reach a customer account financing strategy. .

Several times, the decision to consider financing cash flows of your receivables comes from problems directly related to collections – in some cases, the slow nature of your client can affect your ability to buy stocks or payroll – payroll – These are typical factors that grow clients to factoring.

When you finish (in reality that you sell) your receivables under this type of installation, you immediately receive an 80% advance on your invoice, which allows you to respect the obligations and to develop your business.

Most corporate owners know that if they had access to the rolling capital, they could easily develop their business – yet the traditional sources of business financing in Canada, that is, approved banks have rendered Difficult the end of companies to finance receivables in a way that makes sense for the company. owner. In some cases, as we have noted, your business has had challenges that temporarily supply cash flow funding.

Talk to a reliable, credible and experienced business advisor in this area – determine whether customer accounts are right for your business and you focus on an installation that meets your needs and needs.