“The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality,” says multimillionaire businessman Chris Chocola. While it’s neither wise nor fair to completely dismiss balance sheets and income statements, it is true that cash is king when it comes to a company’s solvency.
A company can report impressive income, but if its accountants are only focusing on accounts receivable and revenues on paper, the company could be in danger. It’s a funny situation: a CEO of a large company may get an ego boost from high revenues, but another CEO running a smaller company with lower revenues may have more working capital in hand.
What’s real is what’s sitting in your bank account, not what’s sitting in your stack of outstanding invoices. Cash flow determines a company’s ability to continue operations and keep its doors open.
How can you improve your cash position and ensure a healthier cash flow? Factor those invoices and get paid upfront without waiting weeks or months for customers to pay their bills. Invoice factoring is a fast and easy no-debt way to stabilize income and grow your business.
- Submit your invoices to the factoring company.
- Select which outstanding invoices you want to factor.
- The factoring company advances you from 50% to 100% of those invoices, minus a small factoring fee. Some factoring firms pay you the same day you submitted the invoices.
- The factoring company handles your collections for you.
- You receive the balance once the customer pays the factoring company.
The result: you have cash in your account to pay bills and funds in hand to expand your business. Revenue on paper may be good for your pride, but cash is king. Choose a top-tier factoring company to help you improve your company’s cash flow.