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Cash Flow From Your Sales - Figured Out - Finally !
Information on invoice cash financing strategy . The ability to generate immediate AR Cash from your sales revenues increases the probability of business financing & financial success
We advise our clients to track something as simple as the ‘ Turnover of Working Capital ‘ – Take your sales for the time period, example, month, or year , and divide by you working capital which is calculated by current assets minus current liabilities . If your ratio is trending higher you will find that you are having more working capital challenges.
Our clients often ask for solutions though, not a financial ratio as we have presented above! Invoice cash, also known as factoring or receivable discounting is one solution to the above working capital challenge. This solution also assumes you have been unable to get any, or enough, bank financing to fund your business.
How does this solution work – it’s a simple process of generating your invoice as you sell your product, and then on a daily, weekly, or monthly basis (it’s your choice) sending these invoices to the factoring or invoice discounting firm. They will on a same day basis send you approx 90% of those funds immediately. You have just generated IMMEDIATE cash flow for your business. The other 10% of the invoice is paid to yourself when your customer pays, minus a ‘ discounting fee ‘ , which is a carrying or financing charge for the factoring firm .
Canadian business owners need to ensure they have the right facility. We encourage clients to get the type of facility where they continue to bill and collect their own receivables during the factoring process. Also, the Canadian business landscape relative to invoice cash/ factoring firms is much different than in the United States.
As a Canadian business owner or financial manager contemplating a factoring facility you should consider the following key points:
-What fees are you paying – ensure your fee is clearly understood and has no miscellaneous costs
Ensure you can bill and collect your own receivables – many factor firms will want to take over to some degree your invoicing and collection function
Ensure you are dealing with a firm that understands the Canadian landscape – many firm are simply branches of U.S. organizations
You should ensure that your capital requirements can be met and that the firm can fund companies in your facility size range. More cash flow means more growth, more profits, and more competitive success for your Canadian company.
That is a good thing!
7 Park Avenue Financial :
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
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 100 Million $ of financing for Canadian corporations .
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
