Cash flow management is critical for small and medium businesses. It’s the lifeblood of your company, it keeps business ticking over, and it needs to be managed carefully. Cash flow problems generally come down to one thing – cash coming in too slowly, and going out too quickly! Encouraging customers to pay quickly, while delaying outlays of cash, will provide a more constant cash flow. But as we know is not always that easy to achieve. There are several ways to do this, and it’s important to get it right from the start.
1. Plan your cash flow – ins and outs
It’s impossible to project your cash flow exactly as sales can fluctuate due to a number of reasons, but an estimate can allow you to project future trends. How much cash do you need to have in order to carry out your business, pay staff and suppliers, and make a profit? How much cash will you be receiving, and whether a cash flow finance facility might be a good option to cover the gap of slow payments? You’ll also need to take into account variables like seasonal dips and peaks and determine all those amounts to budget accordingly.
2. Invoice promptly
Make it a habit to invoice your customers as soon as the job is done, rather than at the end of the month. Also ensure your invoice is easy to understand and your bank account number is visible.
3. Establish clear payment terms
Be clear about your payment terms, whether it’s seven, thirty, or sixty days, and include an action plan if payments become overdue.
4. Follow Up
Another way to improve slow payments is to follow up on accounts that fall outside your terms. With Key Factors cash flow finance the follow up of accounts is a part of our service, at no extra cost.
5. Consider factoring your invoices
Invoice Factoring can improve your cash flow by unlocking the cash tied up in your account receivables. This is where Key Factors can help. Send us your invoices, and we can pay you up to 80% of the invoice face value immediately – in as quick as 24 hours – so you don’t have to wait 30, 60 or even 90 days for your client to pay. You will receive the remaining 20% less our fee, when your client pays the invoice.https://www.keyfactors.com.au/services/factoring/
Key Factors can help manage your accounts while providing you with a constant cash flow. This allows you to focus on doing what you do best, which is growing your business. Get in touch with us today, and find out how we can help you.
Steady cash flow is vital for all successful businesses. Have you considered cash flow finance for your small business loans Australia? It is the difference between being able to pay off debts and growing your business, and struggling to keep things running efficiently enough to keep your business alive.
At Key Factors, we know how challenging it can be to run your business smoothly and manage your accounts receivable – that’s why we’re here to help.
How can cash flow finance benefit small business?
Cash flow finance allows small businesses to sell their invoices at a discount to a debtor finance company like Key Factors so that they get paid for them upfront. This means businesses don’t have to wait up to 90 days and can get instant access to working capital by converting their credit sales into cash.
With Key Factors, cash flow finance for small business loans Australia, the cash you receive is aligned with your sales – so the more sales you make the more cash you can get. In addition to giving your small business cash flow a boost, you can also cover the gap of slow payments, pay off expenses, meet ATO obligations, and most importantly grow your business.
How does cash flow finance work?
Invoice your clients for goods or services and send us a copy.
Key Factors transfer up to 80% of the invoice face value to your account in as quick as 4 hours, less a discount rate.
The remaining 20% is provided when your customer pays, less any accrued charges.
Flexible cash flow finance for small business loans Australia
Key Factors cash flow finance for small business has no lock-in or long-term contracts, no ongoing monthly charges or annual charges. There are also no quarterly audits and no property security required.
Contact us at Key Factors, on 1300 884 100 and a local state manager will be more than happy to discuss your needs and provide you with a quote to suit your requirements today.
Consistent cash flow is vital for any business. Slow payments and rapid growth can at times affect cash flow and in turn the overall running of your business. Did you know you get instant cash flow by using invoice factoring to convert your invoices into cash? In this article, we will explore how invoice factoring works along with other tips to improve your business cash flow.
How does invoice factoring work?
With Key Factors invoice factoring, it is very easy to get instant cash flow from your invoices. Simply send us a copy of your invoice and we will send you up to 80% of the face value within 4 hours. The remaining 20% is transferred to you when your client pays us, less any accrued fees.
When you use invoice factoring, you give yourself the ability to pay your staff and business running costs, without the stress of waiting for a client to pay their invoice. Business loans from banks can be difficult and time costly to get approved. Some loans can take up to months to get approved and come with high fees, long-term contracts and often are inflexible with their terms and conditions. Factoring, on the other hand, follows the cycles of your business giving you instant cash flow when you need it.
Benefits of Key Factors invoice factoring
Key Factors has no lock-in or long-term contracts or quarterly audits. Additionally, if you are busy looking after your business, Key Factors friendly staff can also assist with the follow up on customer payments on behalf of your company.
Many business owners choose invoice factoring as it allows them to grow their business without the hassle of worrying about cash flow and following up with customers.
Review marketing strategies
Another way to improve cash flow is to review your marketing strategies. A decline in your sales could be due to a poor marketing strategy. To improve cash flow, review the conversions from your current marketing efforts and see where things could be improved.
Arrange longer payment term with your suppliers
Extending payment terms with your supplier is another great way to improve cash flow. Perhaps reviewing whether 30 days term could be extended to 60 days or even 90 days, and asking for a payment term for those who require payments up front.
Set up Invoice Factoring
If late payments or rapid growth is affecting your business cash flow, consider setting up invoice factoring to get instant cash flow from your sales invoices.
Key Factors is transparent about our fees from the very start. Give our easy-to-use calculator a try to see how much cash you can get from your sales invoices and how much it will cost you up front. If you have any questions about invoice factoring and how it can work for your business, just get in touch with us via our contact page or call 1300 884 100.
Apply today, to experience the benefits of instant cash flow.
One of the most challenging parts of running your own business is the unpredictability. Unlike being an employee with a fixed salary, there are many moving parts that can affect your cash flow. Late-paying clients, unexpected expenses, ebbs and flow in customer demand — all of these things can make paying your bills, employees and contractors on time a constant struggle. When there’s so much uncertainty around your incoming payments from clients, it can be nearly impossible to look to the future and grow and scale your business. Thankfully, there is a way that you can make your cash flow predictable, reliable and regular again. Read on to learn how to forecast future cash flows with factor financing.
What is factor financing?
Factor financing is when a financial institution or funding source pays a portion of your client invoices up-front. Other names for it include invoice financing, debtor financing, invoice discounting and cash flow financing. The business sells its accounts receivables to a third party (called a factor) at a discount, in order to get access to immediate cash. It can improve your working capital by drawing funds against your unpaid invoices.
When you use Key Factors for factor financing, you invoice your client, then send it onto us. We then pay up to 80% of your funds in as little as 4 hours, with the remaining 20% minus any accrued feeds to be released when your client pays us. The cost of factor financing can vary depending on the factoring company. Usually, a flat factoring rate is applied which will determine the factoring fee. At Key Factors, we only charge a flat daily rate on what you use. There are no ongoing monthly admin fees or annual charges associated with Key Factors’ invoice factoring service
How does factor financing help forecast future cash flow?
Factoring is an indispensable strategic and financial resource when it comes to forecasting future cash flows. While surprises can be nice when they involve fun things like flowers, cake or puppies, this certainly isn’t the case when it comes to your finances.
For example, if you have just started working with a new customer or client, it can be difficult to know how cooperative they are with payment terms. Without using factor financing, a business could be left waiting 30, 60 or even 90 days for this client pay. This may leave them completely blindsided and leave them unable to pay outstanding debts — let alone invest in more things that are going to drive their business forward.
On the other hand, businesses that use factor financing know exactly how much they are going to get paid and when. Having a more predictable cash flow will allow you to take on more work, hire more staff and grow your business.
Factor financing is not only pivotal for forecasting future cash flow, but also future business growth. The two are deeply intertwined, with poor cash flow being the number one reason 82% of small businesses fail. With the knowledge that they will be relying on factor financing — not the whims of clients and customers — to manage their incoming finances, business owners can make strategic decisions that are going to accelerate the growth of their business.
From this secure position, they are able to create a robust business plan that outlines a strategic plan to scale. They can decide in advance exactly when and where they will invest in tools, employees and education that are going to skyrocket their growth, rather than having to wait on cash tied up in their accounts receivable.
With Key Factors, funds can be released in as quick as 4 hours, factor financing can also allow you to quickly get on top of financial burdens, like ATO obligations. This can allow you to focus on moving your business forward, rather than focusing on past debts that need to be settled.
Is factor financing right for my business?
If customer payment terms or rapid growth is affecting your business cash flow, you may want to consider setting up factor financing to get instant cash flow from your sales invoices. At Key Factors, we service small to medium businesses from a range of industries. Whether you are a growing company requiring cash flow to service demands, a newly established company requiring working capital to expand, or you simply need to bridge the gap of slow payments, Key Factors can help.
Companies benefiting from Key Factors factor financing generally have a high level of customers on accounts for the provision of goods or services, and have an annual sales turnover ranging from $500,000 to $30 Million. Invoices relating to business-to-business transactions can be considered, not consumer receivables. We also only process invoices which are still within normal trading terms, and those that are for work fully completed, not progress claims.
Interested in learning more about how to forecast future cash flows with factor financing? Apply online, call us 1300 884 100 to find out more, or fill out an enquiry form and we will be in touch within 1 hour.