One resolution you'll want to make and keep
No one likes making new year's resolutions, but improving business cashflow is one resolution that you'll want to make and keep
Whilst we make a lot of promises to ourselves at the start of the year, Finder research discovered that by July, 80 per cent of us have broken our resolutions.
That's all well and good if the goal was to, say, finish a book, but when your goals relate to your business, the consequences can be more serious.
That is why improving your business cashflow should be a new year’s resolution you want to make and want to keep.
Cash flow an ongoing problem for most businesses
According to a survey from the Commonwealth Bank of Australia (CBA), half of respondents (business owners) struggled with cash flow so much that they didn't pay themselves a wage at some point in 2016.
Owners were reliant on three primary sources for ensuring cash flow was sound: sending invoices on time, dipping into personal funds or even using credit cards. This doesn't just create financial strain for the business - it puts pressure on your personal affairs too, especially once interest starts to accrue.
How to give yourself cash flow certainty
“There are many options for improving business cashflow, some more known than others” said David Wright of Classic Funding Group. “Vehicle or equipment finance, for example, are well known and commonly used forms of finance, whilst Debtor Finance is an effective cashflow solution that is seldom thought of.”
Rather than letting credit card debt increase or using personal assets to fund your business, debtor finance arrangements can be a silver bullet. “For businesses that sell on credit terms to slow paying businesses, an invoice finance facility can be a real boon”, stated David Wright. “Once a business delivers the goods or completes a service, they invoice their business customer and can access up to 85% of the value of the invoice almost immediately”.
For companies that rely on invoices being paid promptly, this can be the difference between a steady ship and one propped up by increasing debts.
To ensure this doesn't affect your company in 2017, make your resolution to secure debtor finance and give yourself some peace of mind.