Got Your Cash Flow Financing Priorities Straight? Working Capital Business Solutions

Do you have your cash flow financing priorities straight? Pretty simple question, right? But when we talk to clients about what’s important to them when it comes to business working capital they tell us they spend a lot of time on this issue, but are concerned that they don’t have the resources or information the need to get the help they desire.

And when it comes to size, it unfortunately counts; because small and medium size firms in Canada just don’t have the same access to ‘ financing talent ‘ for the liquidity to fund their operations. And it’s a two edged sword, gravitating between survival and growth.

What Canadian business owners and financial managers can do is to in fact spend their time a bit more wisely on what solutions make sense for their firm. And by the way, some of those solutions, as we’ll discuss, are internal, not necessarily external! The obvious ones are spending properly, trying to self finance from within (yes you can by the way) and ensuring you have got some controls and tools in place to manage your cash flow financing needs and information.

After 2008 and 2009 world wide financial debacle many Canadian firms simply hunkered down and managed their availability of business working capital credit, but boy was it tough.

Growing your business requires working capital. We (hopefully) all agree on that. You need to have solutions in place to finance inventories and convert receivables into access to cash.

As we have always maintained you don’t need to be a rocket scientist to manage working capital and improvements to it. One business pundit describes it as a ‘ block and tackle approach ‘! That approach is as basic as it comes – collecting money from your suppliers, generating better terms with your vendors and key suppliers, and turning those inventories.

That’s what we were talking about before when we talked about the internal solutions, as opposed to the external ones. At that point you’re simply focusing on your ‘ day’s working capital ‘ and your collection period days. That A/R and inventory that you carry should be at the top of your cash flow priorities list.

One problem clients constantly talk to us about is that as a small and medium size firm you have little negotiating power, perceived or otherwise, with larger customers and vendors. The big guys tend to want better terms if they are your customer, and they want prompt payment if they are your supplier. Talk about the proverbial ‘ rock and hard place!

That’s when external cash flow financing solutions come into play in Canada , They include bank facilities, asset based lines of credit, receivable financing, inventory finance, supply chain financing, and monetization of tax credits and unencumbered assets .

Want help with some of those cash flow priorities. Speak to a trusted, credible and experienced Canadian business financing advisor today