cash flow management tips

Accelerate your cash cycle with smart cash flow management tips

Overcome cash cycle droughts with these savvy cash flow management tips.

cash flow management tips


For entrepreneurs and business owners, nothing is more important than positive cash flow. However, between wanting to grow your business, the increasing costs of replenishing inventory, hiring staff and waiting for customers to pay invoices, maintaining a healthy level of working capital can prove to be a delicate balance.

As one report recently found, small businesses are more likely than their larger counterparts to have financial constraints — and nearly a quarter of smaller businesses said they expected maintaining sufficient cash flow to be an obstacle in the months to come.

Add in the fact that nearly all businesses are also concerned about inflation, according to 88% of small business owners who say it’s affected their companies, it’s fair to say that cash flow is top of mind for many.


Luckily, there are some strategies that you or your client can implement to accelerate cash flow.

Update or create a cash flow budget

It’s hard to take action on the cash flow front if you don’t have a sense of where your challenges are coming from. Consider your cash flow budget to be a ‘roadmap’ of your business’ inflows and outflows – everything from your expected sales to payroll obligations, and is a useful tool for helping you figure out where the gaps are.

Having an updated picture of the expenses going out and the money coming into your business for the next year, six months and even shorter timeframes if necessary — such as monthly or biweekly — will give you predictability around expected shortfalls. This can give you warning signs to forecast and adapt early, for example, to seasonal differences in cash flow or if your payment terms will start affecting your working capital. 


Ready for more cash flow management tips? Start by learning how to create your own cash flow budget.


If your business buys or sells inventory on account, you’ll also want to calculate your cash conversion cycle (CCC), which measures how long it takes to convert that inventory into cash. The variables impacting the length of your CCC — such as days payable outstanding — can hurt your cash flow. But you can take steps to shorten the cycle.

Look ahead at the supply side

If you have a good relationship with your suppliers, they may be able to extend options that allow you to alleviate your cash flow woes. This could include setting up electronic payments on a specific day of the invoicing cycle that aligns with your accounts receivable, or taking advantage of extended or flexible payment terms, if necessary.

On the flip side, some suppliers may be willing to give you a discount if you pay your invoice on day 10 instead of day 60, or a lower rate on bulk orders. Both of these will save you money in the long run and increase your business cash flow.

cash flow forecasting in rough waters

Keep your invoicing process on course

Once you’ve established a system for sending invoices promptly and following up on payments regularly, you can also help your customers stay on course for timely payment by ensuring that your invoice is structured properly.

Make sure your invoice contains terms (such as net 30 days), the full name and address of your business, and your tax number. Also ensure the charges are correct and that any backup documentation is attached. Finally, ensure you’ve received written proof the client received the invoice.

Consider factoring your invoices

If you find your invoices are still being paid at net 30, 60 or even 90 days, invoice factoring can accelerate your cash flow, so you can access the working capital you need, when you need. 

Factoring your invoices can help you or your client meet operational obligations and take advantage of opportunities to grow the business when they present themselves.

For small business owner Ray Bowman, Liquid Capital’s invoice factoring services allowed his tree clearing company to move past the cash crunch created when commercial clients took as long as 120 days to pay their invoices – enabling him to pay subcontractors on time and double his sales.

“For a small company, longer invoice payment terms are a real problem. I didn’t have the cash flow capabilities to take back-to-back commercial contracts, especially with subcontractors working for me.”Ray Bowman, Owner and President, Rayzor Edge Tree Service


Find the right kind of customers

Making sure you’re doing business with creditworthy customers will not only give you a better chance of being paid promptly but may also help you secure financing when you need it in the future. To avoid falling into late payment traps, consider requiring credit checks or a minimum credit requirement for new customers.

If you or your client is experiencing a cash flow deficiency or noticing a disconnect between accounts payables and receivables, there are options for bridging the gap. Our Liquid Capital Principals are industry experts who are ready to help you or your clients overcome cash flow challenges.

Want to learn more about accelerating your (or your client’s) cash flow and get customized cash flow management tips? Contact your Liquid Capital Principal to learn how we can help.

Making the world a better place: innovative businesses that are giving back

Looking to set your business apart from the crowd? Here are three innovative businesses who are making a difference in their local communities and around the world.


Whether it’s an innovative product or operational practice, businesses can benefit greatly from putting innovative ideas at the forefront of their company policies, which can result in accelerated business growth and increased brand awareness.

Let’s take a look at three companies who are making a difference with their leading sustainable and charitable business practices.

Prioritizing sustainability: working towards a greener oil and gas industry

Founded in 1999, Civitas Resources is notable for being Colorado’s first carbon neutral energy producer and a leader in sustainability practices. By implementing green technology, Civitas Resources guarantees the safest, most sustainable, and most efficient oil and natural gas operations.

The company recently made news when Chairman Ben Dell announced that Civitas would be committing to plugging dozens of orphaned wells that had been abandoned by other operators in and around Colorado.

“Civitas is committed to producing energy in the most responsible manner and will always strive to be part of the solution for challenges faced by our communities…Stepping up to plug orphaned wells is the right thing for our industry to do,” – Ben Dell, Chairman, Civitas

Civitas is shining a spotlight on how even companies that are working in an industry that leave an environmental footprint can make a commitment to doing the right thing and take responsibility for mitigating their lasting effects.

Setting sights on repurposing eye care waste

As one of the world’s largest suppliers of contact lenses, Baush + Lomb decided in 2016 that the waste associated with eye and lens care was inexcusable. The company took matters into their own hands that year by founding the “One by One Recycling Program”, the first North American initiative dedicated to recycling contact lenses and other eye care products that would otherwise end up in the landfill.

Alongside the Canadian version of the program titled “Every Contact Counts”, today the programs have collected over 48 million units of contact lenses, eye and lens care materials. The recycled plastic then gets separated by material type and given new life as repurposed products – from playground equipment to park benches. 

In addition, “One by One” is committed to donating $10 for every 10 pounds collected to Optometry Giving Sight, a fundraising initiative that aims to solve unnecessary blindness and vision impairment in over 40 countries. The initiative supports everything from schools of optometry and vision centers to the delivery of accessible and sustainable eye care. Not only is this a great way to give back, but it also has created a mutually-beneficial partnership between the two organizations.

«Together, these programs are helping us keep recyclable plastic and aluminum eye health materials out of landfills and oceans so we can help preserve our environment for future generations.» Amy Butler, global vice president, Environment, Health, Safety and Sustainability, Bausch Health

Want to make a difference in the world? Looking at opportunities within your industry to change the status quo can lead to innovative new business practices, an opportunity to gain new customers and leave a lasting difference for future generations.

Giving back one pair at a time

one pair at a time

When Daymond John invested in David Heath and Randy Goldberg’s sock company on Shark Tank in 2014, he could only have imagined the possibilities that Bombas would bring. 

Now, eight years later, Bombas has become one of the most successful Shark Tank deals in history. An athletic sock designed to look and feel better, the company’s charitable commitment is what really sets them apart from other sock manufacturers. 

Socks are one of the most requested donation items from those in need, and if anyone has ever experienced wet shoes and socks, they can understand why. This is why for every pair of socks purchased, Bombas donates one pair to the homeless community. 

As of 2021, the company has donated a remarkable 35 million socks to those in need. Bombas continues to raise the bar as a leader in the apparel industry, with recent expansion into underwear, T-Shirts, and slippers. 

Despite their success and increased product line, Bombas’ charitable actions haven’t changed – for every purchase of a product from their line, they donate one to those in need. Creating a good quality product in the current market can only get your company so far, but creating a good quality product alongside an innovative business plan can push your company that much further. 


Related: Need to accelerate your cash flow to support a new business practice? Learn how invoice factoring can help.


Innovation gets recognized

When companies invest in causes their customers care about, such as sustainable environmental practices and giving back to those in need, they also experience financial growth, new levels of brand awareness and exposure to new customers. For example, Baush + Lomb was a privately owned company since 1853, until the company went public in May 2022 after being bought by Valeant for $8.7 billion. 


Are you or your client interested in investing in new and innovative business practices but don’t have the upfront assets? Contact your Liquid Capital Principal to learn how we can help.

invoice factoring for small business

Invoice factoring for small business: what you need to know to grow

Invoice factoring for small business explained: How owners and financial decision-makers can increase their cash flows with more reliability.

invoice factoring for small business

Whether a company needs to raise working capital, accelerate business growth, hire new talent or buy new equipment, invoice factoring is a popular choice of funding. Organizations of all sizes seeking an alternative to bank loans can quite literally cash in with this strategy. When banks can’t unlock funding due to limited or poor credit history and other criteria that can’t be met, invoice factoring for small business can be particularly advantageous. 

If you work with the right invoice factoring company, your business can operate with less stress when dealing with slow-paying customers — and have access to the money you’ve already earned (aka, invoiced). 

However, you may be wondering, “How do I quickly assess different factoring companies and find the right one who will benefit my business the most?”

Questions you need to ask when selecting an invoice factoring company

When you begin your search for a factoring partner for yourself or your client, be sure to ask these quick questions:

  • How long has the invoice factoring company been in business?
  • What is their industry expertise?
  • Do they offer funding options other than invoice factoring?
  • Can you see some customer testimonials and case studies?
  • How much will it cost me to factor with them? 
  • How quickly does it take to get approved for invoice factoring?

Your answers should match your business needs and help you decide if the factoring company can get you the funds you need.

For a more in-depth guide, take a look at our free invoice factoring guidebook that features ten questions that will help you pick the right factoring partner for your company. 


Invoice Factoring guidebook

Learn the critical questions you should ask any invoice factoring provider in the Invoice Factoring Guidebook

Access the complete guide.



Accelerate your cash flow in four simple steps

If you know invoice factoring is the right choice to accelerate your cash flow, here are four simple steps in the process to help you access capital:


Step 1: Do your invoice payment terms qualify for factoring?

If you have invoices that are due in the short term (for example, in 30, 60 or 90 days), these could be the right invoices for factoring. 

Selling them to a factoring company can provide you with immediate cash flow, as invoices with much longer terms may not always be eligible.  

Related: Is your cash flow suffering from 90 day payment terms? Invoice factoring can help


Step 2: Sign a factoring company agreement

Once you’ve selected a factoring company (also called the “factor”), you’ll sign an  agreement that marks the beginning of a formal business relationship.

The agreement will outline what account receivables (ARs) or invoices the factor is purchasing, along with other terms and conditions that will help fast-track future financing. 

If you’re referring a client to Liquid Capital, establishing a long-term partnership with your Liquid Capital Principal can open new doors for your business.


Step 3: Calculate how much working capital you need for your goals

Based on your immediate and long-term plans, you probably have an idea of how much capital you need flowing into the business.

When you meet with your factoring partner, come ready with that number. With invoice factoring, you can calculate how much working capital you’ll have access to once you factor your invoices. And your lending partner can also help you with these calculations.

Once you know exactly how much cash is being injected into your cash cycle, you can plan to move forward with business operations. For example, you can begin the process of buying inventory or hiring new employees for a busy season — knowing that you can now afford to make these strategic decisions.


Learn more the Ultimate Cash Cycle Guidebook

Access the complete guide.



Step 4: Plan the timelines to collect your reserve

Once the client has paid your factoring partner the outstanding invoice, the factoring company will be able to release the balance of the “reserve fund.” This final amount gives you additional working capital, which can be a welcome cash inflow. 

Work with your factoring partner to understand the timelines for collecting the final reserved funds, and you’ll have a better understanding of your inflows. You may plan for these reserves as ‘top-ups’ to buy additional goods or services, or to act as a buffer in the event of unexpected cash outflows. 


Related: See the definition of “reserve” here, plus other important factoring terms.


The right solution at the right time 

Invoice factoring has gained popularity in recent years because it offers a quick finance solution to all types of businesses, from all types of industries. (But by no means is it a new solution. Read here for some history.)

There are plenty of advantages to using invoice factoring, aside from the obvious need for working capital. But one of the most important benefits is that you’re not adding any more debt to your business. (If you’re ready to learn more, get a head-start and learn all the factoring terminology in our free Ultimate Factoring Encyclopedia.)

By working with a reputable factoring company, you’ll gain a business partner that provides financing when you need it — and also offers both financial analysis and genuine support that helps you scale your business.


At Liquid Capital, we understand what it takes for small, medium, and emerging mid-market businesses to succeed – because we’re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you’re talking to Liquid Capital, you’re talking directly to your funding source and a fellow business person.


Images by Pixabay: Featured and Secondary

Financiamientos recientes – Junio 2022

Will my business qualify for accounts receivable factoring?

Will my business qualify for accounts receivable factoring?

Using these quick checklists will help to make sure your company, sales and invoices are the right fit for accounts receivable factoring.

Will my business qualify for accounts receivable factoring?

When the bank denies your loan, you have options. If you need extra working capital and your bank loan application has been denied, you still have options. Invoice factoring (also called “accounts receivable factoring” or just “factoring”) could give you the funds you need in a very short time – sometimes as quick as within one day. But first, make sure this option is right for your business.

If you fit into this list of criteria, you could be approved for invoice factoring.

Your Company

You’re a B2B company, whether you are a small business or startup, a growing operation or an established enterprise.

Your company provides a service or sells a product to other businesses rather than private individuals.

Your company doesn’t meet the standard qualifications for a bank loan or traditional funding options.

Your company’s credit rating may not be very high, but your customers’ credit is,

You operate in an industry that has reliable customers that pay on invoicing. See a list of common industries below.

  • Agriculture
  • Apparel & Textile
  • Chemicals & Plastics
  • Computer Hardware
  • Consulting
  • Cosmetics
  • Electronics
  • Entertainment
  • Energy
  • Food & Beverage Distribution
  • Furniture & Housewares
  • Freight & Trucking
  • Government Contractors
  • Healthcare Centers
  • High-rise Window Cleaning
  • Import/Export
  • Janitorial & Building Maintenance
  • Landscaping
  • Limousine Services
  • Logistics
  • Machine Shops
  • Manufacturing
  • Media & Communication
  • Metals & Mining
  • Modeling Agencies
  • Oil & Gas
  • Personal Protective Equipment (PPE)

Your Sales

You have sales on the books with dependable customers who are credit-worthy.

You invoice your clients on credit terms.

You have strong sales opportunities in the pipeline.

You have credit-worthy accounts receivable that are very likely to be paid on their due date.

Qualify for Invoice Factoring - Financials


Related: Need a bank loan? 16 ways factoring is better.

Your Invoices

Your customer invoices tend to have longer terms such as 30 or 60 days from the invoice date.

Your invoices are free of liens and encumbrances.

Your invoices are within credit terms and credit limits.

Getting approved for invoice factoring

There are plenty of advantages to using invoice factoring, aside from the obvious need for working capital.



Ready to learn more? Get a headstart and learn all the factoring terminology in our free Ultimate Factoring Encyclopedia

Access the complete eBook.


Your factoring company can provide back-office support and take care of collections for those accounts receivable, freeing up time to focus on your company. You’ll also obtain more working capital that can be used to purchase additional supplies and fulfill new orders, helping grow your business at a faster pace. You can even save money by replacing early payment discounts with factoring to keep your cash flowing.


“Liquid Capital allows me to operate without stress. If a company is offering early payment discounts, factoring is a cheaper option to gain access to money.”
Dave Kip, CEO of Best Broadcast


By working with the right company, you’ll gain a business partner that can provide broader financial analysis and support – so the process can continue at a scalable pace to meet your business needs.


Read more: Should your business use invoice factoring services?

Want to learn more about how invoice factoring and alternative funding solutions from Liquid Capital can help? Contact one of our Principals today.