Working Capital Financing . Introducing A Way To Manage And Finance Your Inventory And Receivable Investments

Working capital quality, not quantity!



OVERVIEW – Information on successful working capital and cash flow solutions around inventory financing and receivable finance





Working capital financing in Canada. As a business owner or financial manager are you 100% comfortable in knowing the signals of when you really have to better manage your business current assets? More so, do you know the tools and solutions that come with that challenge? We think we do, so let’s dig in!

When we talk to certain clients in hindsight around their inventory finance and the receivable investments challenges they make on a day to day basis they are often surprised about how little of some key basics they in fact did not know.

That's because it’s difficult for some to cut through all the finance and financial statement jargon and concepts to figure out the real root of some of those challenges.

What aspect of business couldn’t be more complicated today, whether it’s financing, growing your company, staying on top of the competition, etc?
We're NOT suggesting industrial espionage, but if you knew your competitor had very slow moving inventory or uncollectible or very slow receivables you would be in a great position of profit and exploit market opportunities.

That goes for your firm to, which brings us to the key subject today, the quality of your current assets - i.e. A/R, inventory, and the need and ability to finance them properly.

One of the best ways you can interpret critical upcoming problems in our working capital and cash flow situation revolves around a few ' slick tricks' solutions, as we call them, around your A/R and inventories.

The way most people and even stock analysts look at a company receivable or industry status is to calculate day’s sales outstanding, i.e. DSO, or inventory turns.

But wait; there is even a better way to look at all this! And that is to monitor those two asset categories as they pertain to sales going up or down. If you set up a simple tracking system that captures your sales and a/r and inventory amounts over specific periods of times, i.e. monthly, quarterly, etc ( By the time you get to annually we can guarantee you it will be too late !) you will be able to spot poor collections and growing inventories.

You just might find that sales growth, which hides a lot of problems, is in fact fast becoming your biggest problem. And that's even when your income statement show you're making a profit. (Yes, profitable companies can go under!)

So the bottom line is that growth in A/R and inventory with stable or declining sales will signal huge upcoming cash flow problems. At the same time, the Canadian business owner or manager will get a lot of comfort knowing that if their sales are growing and a/r and inventories are staying the same, declining, or growing commensurately will mean you're a winner in the cash flow and working capital game .

Let's try and illustrate a quick example, which is tougher to do when you don't have a chart in front of you. But let's assume you are tracking A/R, inventory, and sales on a simple chart or spreadsheet. Let's assume for our sample that sales are growing by 20% ( congratulations by the way ) but a/r seems to have ballooned to 100% in that same period?!

What has happened? Simply that yours sales success has shifted problems into your A/R account. And that affects cash flow and cash in the bank.

The solution? Monitor those current assets as we have suggested. And speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with working capital, receivable financing, and inventory finance solutions such as:

A/R Discounting
Supply chain/PO finance
Non bank asset based lines of credit
Commercial bank loans,



Etc!

You've got the power now!







7 PARK AVENUE FINANCIAL
CANADIAN WORKING CAPITAL FINANCING


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 10 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/inventory-receivable-financing-working-capital.html




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