It’s easy to get distracted by the daily challenges of leading a business. Business owners and leaders are always faced with an endless to-do list, usually forced to prioritise the most immediate short-term threats. For all but the most disciplined, that inevitably means that long-term concerns like growth strategy are sidelined, eventually falling off their radar entirely. To get back on track, they need to improve cash flow management, strengthen their supply chain, and ensure their ability to access growth capital and investment.

cashflow solutions, New Zealand

Our new year’s resolutions can help you get your cash flow under control and your business ready to grow in earnest. By using supply chain and invoice finance, businesses can eliminate many of their cash flow headaches, and pave the way for future growth.

1. Make time by getting easier access to cash

The first thing every business owner needs is more time. After all, business owners don’t typically ignore growth on purpose. Instead, the many other urgent tasks that they’re responsible for just take more and more time and funding away from growth efforts, until they stall. The biggest of these time sinks is cash flow management. Sudden unexpected costs, lost clients, late payments, or a drop in revenues force leaders to spend much of their time organising and reshuffling budgets, prioritising outgoing payments, and chasing down late-paying clients. By improving their cash flow management, though, businesses can make themselves more efficient, freeing up more time to focus on growth.

Fifo Capital’s invoice finance is one of the most important tools businesses need to do this. It allows them to get fast access to additional funds, often in as little as a few hours. This functionally allows them to shorten a customer’s payment term at will, getting paid early, often as soon as the invoice is issued, or whenever the funds are needed. Moreover, once an invoice is financed, the receiving financial institution will take payment from the customer, usually eliminating the need to chase the client for timely payment. With that fast and simple injection of cash, businesses can easily deal with most cash flow interruptionS, eliminating the need to reshuffle budgets or hunt for short term credit options.

2. Pay suppliers on time, every time

In order to support its growth, every business needs a strong and stable supply chain that is able to accommodate that growth. New customers aren’t very useful to someone who can’t get the resources to serve them. That’s a problem, because when cash flow is unstable, it can be virtually impossible to consistently pay suppliers on time. Using Fifo Capital’s supply chain finance, though, businesses can ensure that supplier payments are not only always on time, but that they can be made early when needed.

Supply chain finance is a tool that businesses can use to extend their own payment terms, while still getting payment to their suppliers. Instead of relying on their own potentially unavailable funds, they work with Fifo Capital, who issues payment to the supplier on the business’ behalf when the supplier invoice is due. The business, for its part, only needs to pay the financial institution 90 days after the invoicing date. Best of all, if the supplier is dealing with a cash flow issue of their own, they can request early payment in exchange for a discount. That means that suppliers not only enjoy more consistent payment, they also gain an additional cash flow management tool of their own.

3. Clean up your business’ balance sheet

While short term financing and cash flow management tools are excellent for seizing short term growth opportunities, funding a growth phase requires much more significant investment. That means qualifying for traditional business loans, and attracting investors. To do that, though, businesses need to maintain a clean balance sheet.

Financing tools like invoice finance and supply chain finance can help businesses to do this, because they’re both types of off-balance sheet financing. That means that neither involve the business taking on any new assets or liabilities. Instead, existing assets such as unpaid invoices are simply converted to cash, or existing liabilities, such as accounts payable are kept the same while payment terms are extended. Both give the business access to financing without incurring any debts. This gives them an important advantage when it comes to attracting funding for larger growth efforts. A clean balance sheet allows them to signal their ability to meet financial obligations and their financial flexibility to investors and their primary lender.

Fifo Capital’s cash flow management tools help businesses to get their finances under control, and to grow. By learning to strategically apply invoice finance and supply chain finance, business owners can free up more of their time for high-order concerns, strengthen their supply chain, and pave the way for better and more substantial growth investment.