Cash Flow Problems : Here’s Your To Do List For Your Turnaround In Working Capital Management

Cash Flow Shortage ? Don’t Worry The End Is Not Here and Here’s Why


OVERVIEW – Information on how business owners can correct the problem of a cash problem shortage . Working Capital Management is about solutions and actively managing your balance sheet




Working capital management in Canada must make some business owners and financial managers surely feel sometimes that ' the end is near '. It definitely doesn't have to be that way when it comes to fixing cash flow problems when you're focusing on techniques and solutions for ' the fix ' Let's dig in

We're the first to admit sometimes that the term' cash is king'

is somewhat of a overworked cliché , but when you're in the real world ( where we work and toil everyday) achieving cash flow to run your company, pay your bills, satisfy your creditors and , oh yes, grow your business is .. Suffice to say... challenging!

In many cases a large part of cash problems revolves around what we could term ' bulges' or ' seasonality' in a business or industry. It's simply those times when revenue at outpaces sales you would normally have at that time of year - perhaps due to a large contract, order, etc. In the case of retailers it simply might mean: Xmas!

At the other end of the extreme are start up businesses who are struggling to achieve the sales growth they have projected, all the while trying to contain those fixed costs they have.

One other key area of cash problem strife is the concept of ' progress billings '. We meet with many clients who have to bill their customers in stages - typical scenarios are a down payment, interim billings and final payment. This whole process can almost always reach 90 days, if not longer depending on the industry.

So how does the owner/manager address these issues? To the extent they can it’s very valuable to put a cash flow budget/estimate in place based on your historical experience. This will help you explain to banks and commercial lenders the reality of your situation.

Solutions that ' fix' working capital management problems include:

A/R Financing
Inventory finance
Working capital term loans
Commercial bank lines of credit
Non bank asset based lines of credit
Monetization of tax credits

Don't forget also that a key part of the accounting ' cash flow equation ' is accounts payable management. Delaying payables in a positive manner (negotiating better terms and better discounts and pricing) aids cash flow big time. How do you think big firms are so successful - it's because they have ' clout'.

Remember also that in the nether world of accounting profits don't equal cash flow , and the more inventories and receivables that you have in place simply means more financing with the above noted mechanisms are necessary . Naturally your ability to turn over A/R and inventory faster simply means better working capital management and positive cash flow.

If you are looking for a turnaround in your working capital and cash flows seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can ensure your ' to do' list is achievable in business financing success.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Working Capital Solutions





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop