Business Cash Flow Management And Working Capital Solutions and Tools

Cash Flow 911 ! Avoid Business Financing Challenges



Information on business cash flow management in Canada . Resource monitoring tools and working capital solutions can provide the Canadian business owner with a ‘ win ‘ when it comes to financing your company




Business cash flow management .When it gets to the stage where you're ready to call 911 Working Capital things are usually getting pretty tough. Let's examine some key tools, and, more importantly, solutions around what experts tell us is a constant challenge for the Canadian business owner and financial manager. Let's dig in.

Even understanding some of the real basics will always help your firm out, and when you know where to go and what Canadian business financing solutions are available you're certainly in a position to maximize the finances you need to run / grow your business. When you understand liquidity issues that's often a first step in avoiding the proverbial cash crunch.


As one of our favorite business finance pundits put it , its the balance sheet that shows where the bodies are buried ' and I guess we are saying that when you solve the puzzle of how your assets are operating within your balance sheet you're in a strong position to put ' the fix' , or ' the fixes ' in place.

We often meet clients who somehow are a bit more surprised than we think they should be when that cash flow crunch occurs. It's as if it just happened. While we suppose there are some events that can very quickly precipitate a working capital shortage (perhaps the quick loss of a very large client, etc) the reality is that these sort of issues are probably a bit more in what we could call ' creep mode ‘.

So what are those issues? They include slow moving or inventory that’s obsolescent , accounts receivable that are being collected to slowly ( or not at all ?) , and prepaid accounts and fixed asset balances that are bulking up your balance sheet but doing nothing for cash flow . When you can successfully talk to and address the balance sheet asset accounts that will or can convert into operating capital you're in a position to survive, grow, and even get big fast!

Don't forget also that the whole concept of cash flow (it’s actually a complex concept and a simple one!) revolves around tying your income statement into the balance sheet when you're looking at your overall financial position. It goes without say that and term or asset monetization lender is going to be looking at how you manage the dynamics of those cash flows.

What are then some sources of cash flow financing? They include:

Chartered bank operating lines of credit

Receivables financing/discounting

Working capital term loans

Non bank asset based lines of credit

Sale leaseback of owned fixed assets

Tax credit monetization

Purchase order/supply chain finance

One of the best ways to analyze and manage business cash flow is to constantly monitor the changes in your sales as they relate to your operating expenses , and , as important , or more so the increases in your accounts receivable and inventory levels . Keeping it simple - we're saying that if your sales are growing at 25% make sure inventory and A/R levels arent growing at 40%!

If you run your company incredible efficiently when it comes to asset turnover and management, and arent in high growth mode you will actually need little cash flow finance. However, if you’re growing, investing in fixed assets and have significant increases in A/R and inventory you're approaching CASH FLOW 911 modes!

If you want to win the cash flow battle consider some of the monitoring solutions we've provided here seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance needs via solutions that work... for your company .





Stan Prokop - founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

CANADIAN BUSINESS FINANCING

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


BUSINESS CASH FLOW MANAGEMENT & WORKING CAPITAL





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com













Stan Prokop

May The Force ( Of Business Cash Flow ) Be With You ! Focus On These 4 Working Capital Management Issues .

Understanding Business Cash Flow And Working Capital Dynamics

Information on business cash flow management issues and working capital challenges for Canadian business owners seeking financing success.



Business Cash flow management in Canada. That’s a very powerful force in the overall success of your business... as they said in the movie ' may the force be with you '.... and here's why and how!

Let's examine some of those forces and focus on what key areas ultimately are critical to your financing success when it comes to working capital, growth, and daily operational survival.

Every Canadian business owner or financial manager probably agrees on the fact that there is nothing more powerful in their businesses than ' cash on hand ', or access to cash via working capital solutions. Early on in business careers we mistakingly focus on the fact that profits = cash on hand / available. But it isn’t so, as we all quickly discover.

The reality is the cash generated from your business goes into purchasing fixed assets, paying suppliers, etc.

So what are those four key forces of business cash flow management? Simply speaking they are government liabilities, debt and repayment thereof, working capital access, and finally, last but not least, withdrawals of profits from your business.

It's critical that the business owner in manage those forces on an ongoing successful basis. Paying taxes promptly and ensuring debt is repaid in a timely manner are of course job #1 if we had to maintain a pecking order on these things.

A pretty reasonable rule of thumb is that your firm has a couple months of working capital to cover operating expenses outside your credit facility

Working capital, unfortunately, tends to be somewhat of an up and down business for the Canadian business. Is there a good way to get a handle on whether you're winning when it comes to the area working capital forces? There is, and it’s to focus on operating cash for your company, which is very easy to calculate.

How is that calc done? Using a month end calc as an example take your profit and add back the positive or negative changes in receivables , payables, and inventory . Example - if receivables went up in the current period that’s a negative number, if inventory went down that’s a positive number. All of this is in relation to sales of course.

When it comes to business cash flow management and working capital don't make the mistake of confusing term debt and lines of credit. Business credit lines are good things when they fluctuate - if you're always at the top of your bank or asset based credit line that’s basically not a good think and you're avoiding the issues of additional permanent equity in the business

Term debt is not a bad thing if it’s used for the right reasons. Equipment finance is a solid example of taking on term debt if you are profitable and can retire the lease as agreed, all the while using the asset to generate sales. Real estate debt, as large as it might be is actually good debt given you're building equity with repayment.


What then are our ‘take aways ‘? It’s simply that you need to understand your cash cycle, borrow in the right manner, and focus on taxes and equity take outs properly.


In Canada working capital and cash management solutions come from 6 key areas:

Receivable Financing

Inventory Financing

Asset based lines of credit that combine A/R and inventory

Tax Credit Monetization

Securitization facilities

Working Capital Term Loans

Speak to a trusted, credible and experienced Canadian business financing advisor on how your firm can ensure the force (of cash flow and working capital!) is with you!

Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com
/business_cash_flow_management_working_capital.html