2,450 Ways To Pinpoint Cash Flow Problems Via Working Capital Solutions In Canada

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INFORMATION ON BUSINESS CASH FLOW SOLUTIONS

Cash flow problems and working capital solutions to those challenges that are faced by Canadian business. Are we really saying there are 2,450 ways to pinpoint the problem? In a way yes. Let's explain.

Although cash flow challenges are more than ' intuitive ' in the real world (that’s where we ourselves work) Canadian business owners and financial managers often fear or just simply don't understand how to quantify those problems. The reality is that the actual problem can be quite clear if you go to your financial statements, preferably on an ongoing basis.

Let's assume you can identify 2 data points in your financials - the number of simple relationships you can look at with those 2 numbers is of course 2.
3 different numbers or data points in your business numbers would allow you to calculate 6 relationships, 10 for example would allow you to calculate 90 relationships. Finally, if you identified 50 numbers in your balance sheet, income statement, or cash flow statement you would, you guessed it, be able to formulate 2,450 calculations. It's of course a geometrical solution we have just laid out.

So, your next question is of course ' what the heck is your point?! )

It’s simple actually; the relationships we are talking about are in fact more commonly called ' ratios' by financial types. Naturally you don't have to calculate 2,450 ratios to in fact get some meaningful data from your financials; a small handful will do nicely!

Let's examine quick examples to show you how you can very quickly pinpoint cash flow problems in your firm. Let's take 3 data points, your sales and your working capital. The working capital calculation is current assets over current liabilities on your balance sheet. Isolate those three data points and do the calculation. The actual calculation is Sales / Working capital.

Congratulations, you have just completed your working capital turnover calculation! It measures how your company is in fact managing your cash flow, because as sales go up inventories, receivables and payables rise also. All of those have been captured in our final calculation! In effect you have just mastered a simple way to compute the very complex relationship within your firm on a daily basis as you sell and collect.

Important to note that the number in and of itself is not meaningful. When you track it over time, say monthly, it becomes VERY meaningful. And for the purposes of this ratio a lower number is a better number.

It's also important to note that each industry in Canada will have a different number as a result, ranging anywhere from 2 to even 18. Each industry is different.

We're not accountants but what we have hopefully demonstrated is that any business owner or manager can use any number of data points in their financial results to pinpoint cash flow problems and performance.

It's all about asset management; in our example it’s those current assets that pay bill and allow you to make loan payments. Your goal is to manage the ' cash on hand ' account in your business well enough to put you in constant survival mode - and it's a jungle out there!

In Canada various solutions exist for cash flow problems. They include receivable financing, bank lines of credit, asset based lines of credit, monetization of tax credits, and supply chain finance. Each of these works in a different way, but all provide you with working capital solutions.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with score carding and solving your cash flow challenges.






7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

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 .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
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

Don’t Sweat Business Cash Flow Problems : Save Your Business With Proper Financing

Business Cash Flow Gone ? How To Never Lose It Again

OVERVIEW – Information on financing tools and techniques for Canadian businesses. Business cash flow problems can be eliminated – here’s how

Business cash flow problems have us recalling that saying ' don't sweat the small stuff ‘.

However in the financing challenges your company faces , working capital/cash flows are never ' small stuff ' issues and often can make or break, and even save / ruin your business depending on how you address them. Let's dig in.









By the time your business is facing daily working capital challenges everything seems ' immediate'! Challenges of meeting term or supplier obligations have some owners/managers searching for creative ways to stem cash outflow. Some of those creative ways include using CRA HST and employee super priority obligations in a less than constructive manner.

Growing your Tax Obligations is highly NOT recommended! A separate acct for your tax obligations might actually not be a bad idea. Using an outside payroll service who will handle those remittances is also a solid cash mgmt good habit.

So how do business owners ‘avoid’, as well as ' fix ' business cash flow problems? Under the avoid category there are some time tested strategies that will always work well. These include:

Focusing on proper payables mgmt - without ruining supplier relationships for key vendors. Slowing payables and speeding up collections is Cash Flow mgmt 101 - Some top cash flow experts actually recommend you assess payables in a ' must pay/important to pay/flexible to pay' viewpoint. Negotiating extended payment terms in a proper documented manner gives you maximum flexibility in key cash outflows.

So what about actual credit solutions to those business cash flow challenges? Canadian chartered banks are quickly become not the only providers of business credit. Although non bank commercial financing solutions will always be more expensive than bank capital and the right non bank lenders are also well focused on building relationships and giving you back some sense of control.

What are those ' cash flow fixes' available to replenish working capital and positive cash flows that are alternative to bank solutions?
They include:

A/R Financing
Inventory loans
PO/Contract Finance
Refundable tax credit bridge loans
Non bank asset based business credit lines
Sales/Royalty Finance
Sale Leaseback Options
Unsecured cash flow loans

How you finance your working capital needs is the financial interaction of your assets and finance solutions that make or break your business. Canadian businesses run out of cash for some reasons that are simply just too obvious that they are missed! They include:

High sales growth - leaving you highly invested in A/R and inventory - but not cash!

Paper profits that don't equal cash flow generation

Poor asset turnover / heavy investment in fixed assets / poor margins

If you're focused on saving your business future with proper financing, while avoiding business cash flow problems, seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your needs.




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



Email = sprokop@7parkavenuefinancial.com

ABOUT THE AUTHOR
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.

' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Financing Your Business Cash Flow Problems Shouldn’t Be A Survival Course

Surviving The Cash Flow Gap

OVERVIEW – Information on methods and solutions available to the Canadian business owner and financial manager around business cash flow problems






Business cash flow problems often feel like placing business owners and financial managers in a sort of ' survival course ‘.

When business knows how to measure, improve, and source cash flow solutions suffice to say things can only get better! Let's dig in.

Even the largest corporations in the world recognize the need for cash flow management and access to financing solutions. For businesses in the SME Commercial sector it requires an even more concentrated effort.

We meet with many business owners/managers that sometimes seem, or get ' blind sided' by the external environment. That's why it's important to spend some time planning - in effect it's all about the ' what if ‘. In effect you're attempting to link your sales to collections, other loan payments,

Where business owners/managers miss the boat, either in a small way, or entirely, is forgetting the changes that happen in working capital accounts; simply speaking the changes in A/R and inventory that over time constantly change your cash flow needs.

It's important also to understand you need to forget about the ' cash flow' that goes into investing in items such as equipment, technology. Here it's important to mention that financing solutions such as EQUIPMENT LEASING make perfect sense almost always as business can match future benefits of assets to cash outflows.

A good way to look at solving cash flow problems is by assessing the ' gap ' that arises in business as funds go in and out of your business.

One method of 'fast tracking' business cash flow is to look closely at how you manage and finance your A/R. Many firms offer, or consider offering a ' discount' to their clients for prompt payment. Many customers can't or don't buy into this method. And certainly all of your customers in total would never all at once buy into paying you promptly.


An alternative solution to achieving full success with this strategy is to finance your receivables through a discount receivable financing program. That 2% that you considered offering your clients for prompt cash payment is essentially the same cost as when you utilize a program such as CONFIDENTIAL RECEIVABLE FINANCING . The difference is of course that you are in charge, as any or all of your sales can be converted into immediate cash flow

If you can demonstrate you are eligible for bank financing its clear that that same cash flow benefit can be achieved. However, in order to do that you must demonstrate a solid historical cash flow, profits, positive shareholder equity, as well as personal covenants from owners.

Other methods to ‘survive’ and win re: the cash flow gap include:

Inventory financing
Merchant advances
Asset based non bank lines of credit
Tax credit Monetization (SR&ED BRIDGE LOANS)
Purchase Order Financing

Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in running and finishing the working capital survival challenge!




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 = Canadian Business Financing Solutions For Cash Flow Challenges






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

Business Cash Flow Problems? Solving The Mysterious Disappearance Of Your Company’s Working Capital

How The Other Half Deals With Business Cash Flow Financing

OVERVIEW – Information on business cash flow problems in Canadian business. How can working captial challenges be solved internally and externally




Have business cash flow problems? Ever feel like putting out on ' APB'

on working capital for your company, in an earnest search to solve the disappearance of your cash flows? We've got some internal (as well as external) solutions. Let's dig in.

Top experts tell us that the key to successful working capital is to understand the techniques you have available to manage business capital flows.

We've long been a fan of the ' DUPONT MODEL ‘. Without getting to technical its a formula developed by a DuPont engineer many years ago that assesses how your profit margins , asset turnover, and debt load work together to show you how you are doing on sales and cash . It can be set up on a simple spreadsheet and can nicely tracked to show you how you are ' INTERNALLY ' managing assets and business cash flow. Check it out.

But why do you actually have to have a strong handle on cash flows. One simple reason is that it underpins your business and gives you credibility with all your lenders, as well as owners of course.

A lot of clients we meet are still in early or, alternately ongoing development of their products and services. Developing that costs money and if your firm is taking advantage of the SR&ED program in Canada (trust us, your competitors are!) then you also have the ability to finance your SRED claim for immediate cash flow. It is a great tool to fund your company, most particularly if you're in early stages of revenue.

Your gross margins are also an important part of your cash flow. Think about it. The ability to cover your costs, realize greater profits, and then turn over assets such as inventory and receivables basically creates a cash flow source for your firm.

Those sales at a higher price allow you to monetize current assets via bank credit lines and non bank asset based business lines of credit. Keep in mind that you, the business owner or financial manager can dramatically affect cash flow in 3 ways:

Turn assets over more quickly
Lower your costs
Raise prices

We'll let you take care of costs and pricing, and our focus will be on asset monetization and proper borrowing.

If your firm can satisfactory manage your inventory and A/R they will always yield more cash flow.

When you borrow to finance cash flow and working captial you do that through either working capital term loans or asset monetization... What though are the factors that dictate who you can borrow from and how.

Those factors include:

The size of your company - i.e. assets and revenues
Your current overall cash flow situation
Financial credibility re current borrowing arrangements, quality of financials

The rates and costs of different types of working capital financing ( receivable finance, inventory financing, SR&ED finance, asset based non bank lines of credit, Canadian chartered bank financing ) vary based on those factors noted above.

If you're anxious, or require further investigation into the how ' THE OTHER HALF ' deals with the disappearance of cash flow seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in business cash flow problems .. and solutions!





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 :




7 Park Avenue Financial = Cash Flow Financing for Canadian corporations




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

Phone = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Stan Prokop

Working Capital And Business Cash Flow Problems?

Consequences of Inadequate Cash Flow And Growth Financing


OVERVIEW – Information on solutions for working capital and business cash flow problems for the Canadian business owner .




Business cash flow problems. Are there some consequences to working capital management and solutions? You bet there are, so let's recap what's important when it comes to this critical aspect of running, managing and growing your business.

Your ability to both manage working capital, as well as finance it will ultimately decide the long term success of your business. (A lot of small things happen along the way too!)

So how in fact can you exhibit good business working capital management and can you in fact measure that concept ? Look at the following points and ask yourself as a business owner or financial manager where you fit in -

Do you typically have enough cash on hand to cover your operating needs?

Are you in control when you look at the overall daily management of your accounts receivable?

Does the cost and flexibility of the financing you have in place reflect your overall needs?



It is safe to say that if you answer to any (or perhaps all?!) of the above you're either continually muddling through a cash crisis, or worse, the survival of your company is at risk.

So how does a firm actually ' run out of cash ' and what can you do to spot this as far in advance as possible? Believe it or not ' fast growth ‘, something the owner and entrepreneurs and managers dream of actually becomes a double edged sword relative to business cash flow problems.

That's because all that growth bulks up your balance sheet and you’re now carrying inventory, receivables, and new fixed assets all of which make you balance sheet rich and .. you guessed it... CASH FLOW POOR! To make matters worse , when sales in fact start to slow down at the same time inventory turns slow and a/r deteriorates you're as close to crisis mode as you ever will want to be .

A key point we make here also is that we're assuming all this growth is bringing you profits. If in fact it isn’t, i.e. higher costs then you're at the edge of your own version of the fiscal cliff

one more time. No business owner wants to be there!

So are we all doom and gloom today? Hopefully that's not how it's coming off. The reality is simple tools such as a cash flow budget and financing solutions such as:

Receivable financing
Asset based non bank credit lines
Commercial bank lines of credit from Canadian chartered banks
Tax credit monetization
Supply Chain Financing
Securitization
Unsecured cash flow loans

all can help you get to the working capital goal line. Oh and by the way that cash flow budget isn’t a sales forecast, it should properly reflect the timing of inflows and outflows to your capital.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in measuring and solving working capital and business cash flow problems.

7 PARK AVENUE FINANCIAL
CANADIAN WORKING CAPITAL AND CASH FLOW FINANCING EXPERTISE



Stan Prokop





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/working-capital-business-cash-flow-problems.html

Therapy For Business Cash Flow Problems ? Working Capital Financing Solutions And Alternatives

THIS DAY IN CANADIAN BUSINESS HISTORY :
April 4, 1896 - News of the Yukon's Klondike gold strike reaches the outside world. Vancouver, BC

Our Comment : 'Thousands of stockbrokers descend on Canada with a viewpoint to providing valuable ' tips ' to clients '- STAN PROKOP





Looking Inside the Cash Flow Conundrum

Information on solutions and alternatives for business cash flow problems in Canada . Working capital financing when Canadian business needs it most .



Business Cash Flow Problems? Maybe some working capital therapy in order. Therapy - it's what they call a ' curative power ' , so let's examine some curative powers around one of the biggest challenges Canadian business financing, working capital and cash flow needs.

We're all familiar with the old phrase ' you need money to make money ‘; well scratch that, we have re-written that one for today and we'll offer up ' you need working capital to make more money '!

The unfortunate part of talking to many entrepreneur and business owners in many cases is that there seems to be a common belief that sales growth will take care of all your business problems ; the reality is that it will take care of things for awhile, but trust us, not for long.

Profits do fund growth for an interim period, but in the end you need to address some very basic issues. An example? Your valued vendors and suppliers want to be paid before you get paid from your own customers!

So what’s the solution? Most business owners and financial managers would offer up ' go to the bank ' or ' put in some more owner equity ‘. That's works of course, if that’s in fact possible - key word ' IF '!

What those sales have done is create a gap... for some clients we meet it’s a rather big chasm or canyon!

Naturally some firms need more working capital than others to address the business cash flow problems we are talking about. That’s because something known as the ' cash conversion cycle ' varies from industry to industry and probably even business to business within that industry.

The cash conversion cycle can be easily calculated by any business owner. The formula? Take your days sales outstanding, add your inventory on hand days, and subtract your payables. That number essentially gives you a very basic ' known ‘. It tells you how long it takes a dollar to travel through your company. And trust us, sometimes that ' travel ' seems to look like a slow meander!

As we said some firms require more cash flow than others - an example might be a large pharma firm who invests tons of money in advance of even bringing a product to market - assuming it’s approved by the government for use! On the other hand a large retailer doesnt sell on credit, they only take cash and credit cards, so their conversion cycle might be a lot less.

So, our take away today? The shorter you can control you cash conversion cycle, the better! And you can accelerate cash flow by bank lines of credit, receivable financing, and inventory financing, monetizing tax credits, or securitizing your receivables if you're a larger firm.

Speak to a trusted, credible and experienced Canadian business financing advisor to assist you with your business cash flow problems and working capital solutions to accelerate your cycle of cash.









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_problems_working_capital.html