Sin categorizar Archives - Página 5 de 16

Quickly identify and correct financial missteps with a cash flow audit

agosto 8, 2022/en Sin categorizar/por Helen Burnett-Nichols

Conducting a cash flow audit can help you spot areas of weakness in your business so you can correct any issues before they become a bigger problem. It can also highlight areas of opportunity for growth.

In nearly every aspect of running a business — whether marketing, sales or finance — knowledge is power. Knowing the ins and outs of your company’s cash flow is one of the keys to success, particularly for entrepreneurs and small business owners. So, too, is a regular review and assessment of the state of your finances. This ensures you will have enough working capital to pay your staff, keep up with operating expenses and grow your business when opportunities arise.

A cash flow audit or cash flow analysis is an invaluable tool for taking a closer look at your business’s working capital over a certain period. The result gives you a bird’s eye view of areas of opportunity and weakness. It will help you take all inflows and outflows into account to ensure you have a clear sense if your company is meeting its goals or if it’s time to find new solutions.

To conduct a cash flow audit, follow these steps:

1. Start with your cash flow budget

Ideally, you’ll have a cash flow budget in place, but if not, here are a few tips for creating one.

Once this is created, review your forecasts. Look for months where you may have fallen short in the past, and analyze potential for the same to happen in the future. If you’ve reviewed this in the past, now is the time to take a deeper dive to see what’s going on.

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.

2. Gather your information

You’ll need data to conduct a cash flow analysis that delivers valuable information about the state of your business.

First and foremost, look at your income statement – which will set out your company’s performance, including your sales revenue minus the cost of goods sold and other expenses. The income statement shows your bottom line (or net income) for the period.

Next, and perhaps most importantly, as Harvard Business School explains, you’ll need a cash flow statement to give you a clear picture of how your business received and spent cash during a specific period. The cash flow statement takes the net income from the income statement and adjusts it to include cash flow from your operations. This includes your accounts receivable and payable, and cash flow from investing and financing activities, to show you how your cash and cash equivalents have changed over a specific period.

If applicable, seek out the help of your accountant or bookkeeper to streamline the cash flow auditing process — some accounting software programs and tools will also be able to provide you with your cash flow statement within a specified period. Rather than waiting until tax time or until problems arise, reconcile your accounts monthly so that you are able to address any discrepancies quickly.

3. Analyze your data

Once you have these numbers, you’ll be able to see specific areas where your business is experiencing cash flow shortfalls. Perhaps you have more outstanding accounts receivables than you thought, for example. Ultimately you will be able to identify exactly where you are experiencing leaks in your cash flow pipeline.

4. Take action and prepare for the future

With your newfound information in front of you, you can better align your cash flow and business processes with your goals.

For example, if your cash flow audit identified a noticeable gap in working capital, specifically, a large number of outstanding invoices with credit-worthy customers, invoice factoring may be the ideal solution to turn your near-term assets, or invoices, into cash.

Address any cash flow obstacles

With alternative funding options from Liquid Capital, you’ll be able to quickly address any shortcomings in your cash cycle. You’ll be working with a Liquid Capital Principal who is a business owner like yourself, so they understand the challenges and opportunities you face daily.

Want to learn more? Contact your Liquid Capital Principal today.

3 next-gen companies innovate to combat food insecurity

agosto 3, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

Here’s how three businesses are leading in sustainable, innovative business practices to help feed North America and combat food insecurity.

When an industry has operated and created products the same way for decades, it can be difficult for companies to break free from tradition and forge their own path forward.

While being innovative can be time-consuming, costly and bring on additional challenges, the long-term impacts can increase a company’s sustainability, profits and overall success. In the food and beverage industry, many companies are taking the initiative to implement better, more sustainable and more efficient business practices.

Even if you aren’t operating in the food and beverage space (as are the following companies), you’ll find inspiration in their stories — and they may even spark an idea for how you can improve upon your own operations.

Next-level farming

When you think of farming, the image of a red barn beside endless acres of crops blowing in the wind might come to mind. But what if that sprawling land was turned sideways?

That’s the idea of vertical farming — growing crops upwards instead of across fields and completely altering the traditional approach to growing produce. And Elevate Farms is at the forefront of the industry as one of the first vertical farming facility manufacturers in North America, founded in 2018.

Their state-of-the-art facilities can achieve impressive results in growing farm-fresh food while limiting water usage, all by combining proprietary LED light technology with photobiology and robotic automation. This has allowed Elevate Farms to redefine what a “traditional” farm not only looks like, but what they can produce.

For example, while traditional farms take an average of 10 gallons of water to grow one head of romaine lettuce, Elevate Farms can do it with one gallon. This innovative technology allows for a higher crop yield per square foot of land. And this higher productivity can move us towards eliminating food insecurity in isolated areas such as northern communities in Alaska and the Yukon.

With 80% less labour needed compared to a traditional farm, 100% traceability due to blockchain technology and a 73% higher capacity than their competitors, it’s no wonder that Elevate Farms has made such a name for itself in the agricultural space.

Growing fresh food anywhere

Isolated areas often don’t have the suitable soil or growing conditions for vibrant, sustainable farms. As a result, they often face issues of food insecurity — forcing people to ship food in from elsewhere. This leads to extremely high grocery bills, lack of access to fresh and nutritious food, degradation of health in remote communities and other negative spinoff effects.

Enter Growcer, an agri-tech company founded in 2015 with a mission to reduce the issue of food insecurity in isolated areas, regions with poor soil quality or locations experiencing droughts. As a manufacturer of hydroponic (soil-less) container farms, Growcer can grow local produce anytime and anywhere. Whether in the Arctic or the desert, these container farms can grow fresh produce in as quickly as six weeks.

The company has also implemented an innovative new program with the goal of revitalizing gardening in remote Indigenous communities. This has given people access to fresh foods to which they wouldn’t have otherwise had access.

Turning food waste into profits

Every year, North Americans waste about 50% of all edible food produced. While some of it is unavoidable, the majority of the waste is due to stock management issues and consumer “pickiness.”

So what can be done to mitigate the waste?

That’s exactly what Loop Mission’s founders asked when they started the business in 2016 to repurpose rejected food. That journey started by turning unwanted fruits and vegetables — what they call the “outcasts of the food industry” — into delicious cold-pressed juices.

As a self-proclaimed “food waste fighting powerhouse,” Loop Mission has created a successful e-commerce business by selling their products direct to the consumer on their website. Meanwhile, they’ve also been gaining popularity in local brick-and-mortar stores, gaining another route into the competitive marketplace.

On top of creating an innovative product for consumption, Loop Mission subsequently became a leader in food waste management, saving more than 6,872 tons of fruits and veggies, 446 million litres of water and avoiding the emission of 5,483 tons of GHGs.

Innovating to fuel business growth

For any company looking to evolve, innovate and compete, they have one thing in common regardless of industry: the need for working capital and healthy cash flow.

All next-gen companies still need to meet the demands of payroll, R&D, manufacturing, supplier payments, promotion and distribution of their products. But if they don’t have incoming cash flow, stuck waiting for their customers to pay invoices, it can lead to cash cycle disruptions — holding them back from new ventures.

If that sounds familiar, there are ways to improve cash flow and keep innovating. With alternative funding solutions such as invoice factoring, Liquid Capital can help you unlock the power of your outstanding accounts receivables and access the working capital you need to disrupt, innovate and grow stronger.

To learn more about invoice factoring, contact your Liquid Capital Principal today.

Supercharge growth by leading with innovation

julio 26, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

Only 18% of execs have the skills needed to lead. As markets, technology and workplaces evolve, leaders will meet significant challenges and will need to brush up on their foundational skills. Get ahead by leading with innovation in all areas of the business.

As a business leader, it can be hard to know exactly where to focus when everyone and everything demands your attention. For those in charge, schedules are very tight, multiple problems can arise simultaneously and unforeseen challenges can derail even the most rock-solid plans.

The most successful leaders rely on their foundational business skills to tackle these challenges—but the problem is that many leaders are missing these skills. In fact, 82% of leaders lack all the abilities to effectively steer their organization.

What skills do strong leaders need?

Today’s leaders must be able to build trust, be transparent and communicate clearly with their teams. Motivating and engaging employees is also important for driving outcomes and overcoming challenges or adversity. And they must be able to make productivity-based decisions.

Ultimately, the most successful executives have a strong mix of communication, interpersonal and executive-functioning skills.

To gain clarity and provide direction to your teams, start with the foundational basics. Successful business leaders should focus on three areas as their baseline:

Create a shared vision
Set strategic objectives to achieve specific performance outcomes
Offer strategic direction to create value in innovative ways

As challenges arise, these three areas can be your North Star, guiding you and your teams forward. If you start to feel lost or if new challenges arise that can sway you in a different direction, revisit your intended visions, objectives and strategic direction to recenter on the original priorities.

Ushering in a new era of leadership styles

“Traditional” leadership styles are becoming outdated and massive transformations are happening at breakneck speed. Consequently, leaders must pursue new management methods to better facilitate:

Employee engagement
Resolving internal disputes
Improving productivity and efficiency
Change management
Making better choices
Encouragement of ethics, inclusivity and respect
Promoting a goal-oriented culture

As industries evolve, business leaders can innovate in all areas of the business. It’s not just about technology alone, but as a leader, you can push forward new products and services, define innovative workflows to improve operational efficiency, revise and refine internal processes or completely evolve the business model.

For two well-known examples in the modern era, innovative leaders at Uber and Amazon modified processes at the very core of their operations. By doing so, they not only rose above their competition, but they redefined their industry and innovated completely new ways of doing business.

By considering how to innovate across all departments and in every process, companies like this are shifting business—and the world at large.

Did you know?

Organizations with skillful leaders and higher employee engagement have a higher bottom line (as much as 147% higher earnings per share) than competitors.

You must be compelled to innovate

Naturally, leaders have an innate desire for growth, and many already see “innovation” as the way. To truly succeed, they must not only recognize it, but then implement it.

According to The Boston Consulting Group, 79% of executives rank innovation in their top three business initiatives. They also made a critical observation that the highest ranking companies have a shared focus on research, technology and development, which helps them stay one step ahead of competitors and fuel growth.

Tesla is a perfect example of a company whose investment in innovation has led to unprecedented growth, having surpassed $206 billion in 2020. Through a carefully crafted and deliberate innovation strategy, the company has quickly risen to new heights of success and notoriety. In this instance, strong leadership, vision and innovation drove them forward.

Extinction of Fortune 500s? Innovate to stay relevant

Of course, businesses have to adapt to stay relevant and profitable. If they can’t (or won’t) adjust, they’ll eventually perish. This sounds obvious, but it could catch some of today’s “big fish” off guard.

A recent study of C-suite executives in the US and Europe see digital disruption as one of the biggest threats, predicting that 40% of Fortune 500 companies will be “wiped out over the next decade.”

Leaders who embrace technology will make their businesses more agile, able to disrupt industries and compete against top-industry players. Likewise, leaders will need to adapt to social and cultural shifts—and leadership can’t just stay the course and operate the same way for decades on end.

The oil and gas industry, as one example, has increasingly come under fire for the environmental repercussions of its practices. However, despite these criticisms, many of the top producers continue operating the way they always have. While there are many other factors at play, there will always be opportunities to innovate, adapt and improve a company’s social and environmental impact.

For Civitas Resources, Colorado’s first carbon neutral energy producer, leadership saw an opportunity to do things differently, and have done so with their orphaned well project. The company’s Chairman, Ben Dell, announced that Civitas would plug dozens of wells that were abandoned by other operators in and around Colorado. By making a commitment to do the right thing, they are improving their environmental footprint and taking responsibility for mitigating their lasting effects.

Innovate to differentiate

Innovation is about pushing into new territories—and when done effectively—can support your efforts to differentiate from your competitors. This can help you improve processes and products, which can help you stand out in an oversaturated market.

A great example in the notoriously competitive retail industry, Bombas has been shaking up the athletic apparel industry with its premium-made, cost-conscious socks. Their “sell one-donate one” mission dictates that the company donates one item for every item sold to homeless organizations across North America.

To date, Bombas has made $100 million in profit and has donated 35 million pairs of socks to those in need. This has allowed the online retailer to compete against big industry players while also making a difference in people’s lives.

Working towards a brighter future

For long-term organizational success, leading with innovation is vital. But it takes time, persistence and investment. When done well, it can help build trust and fuel ‘innovation thinking’ that is adopted further down the organization.

Innovation can also require increased working capital to keep up with manufacturing, inventory, payroll, R&D, operational expenses and to launch new strategic initiatives.

If you or your client have an opportunity to take a step towards innovation, but need additional cash flow, alternative funding such as invoice factoring can help. By turning open invoices into positive cash flow, you can continue innovating while being assured you’ll have the funds to meet the demands of the business.

Get in touch if you’d like to learn more about funding options as you take the next steps in your business growth.

UP NEXT: Discover how these companies are leading with innovative business practices.

A business owner’s guide to facility management

julio 20, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

Do you have a strong facility management strategy? Is it being overlooked? Do you need to invest in updating your current one? This guide will help you get started.

Facility management, also known as facilities management (or FM) is all about the details regarding buildings, facilities, assets, and even how employees work within a space. However, for many business owners, CFOs, and business advisors, this critical component of operations is often overlooked.

This guide to facility management will help you understand the importance of having a strong facility management strategy, as well as provide tips for creating and updating your company’s.

The fundamentals of facility management

According to the International Facility Management Association (IFMA), facility management is “a profession that encompasses multiple disciplines to ensure functionality, comfort, safety, and efficiency of the built environment by integrating people, place, process, and technology.”

It encompasses all the systems, tools, and services needed to ensure the proper functionality, safety, and integrity of the built environment, including its infrastructure, surrounding grounds, and allied physical assets.

One of the unique aspects of facility management is just how diverse and complex it is. FM typically encompasses everything from property management-related services, to risk management, cleaning, security and more.

The sheer extent of the FM function can be seen in the diagram below:

Facility management is not only about assets and the physical or built environment. It’s also about the health, safety and productivity of employees and others within a given facility, be it a factory or commercial building.

The management of facilities is as much about the wellness and comfort of employees and occupants, and optimized space usage, as it is about the maintenance of heating and ventilation systems or landscaping of corporate gardens.

The importance of a management system focus in FM

Taking a management systems-based approach to your facility management strategy creates focus and a clear path forward. Since facility management can be multi-disciplinary and extend across an entire organization, it will typically interact with other systems in the company, such as finance, health and safety, logistics, or maintenance.

You may decide to formalize your facility management by aligning it to the international management system standard, ISO 41001, which was first introduced in 2018. It allows a company to benchmark its FM to an internationally-respected standard and, once audited by an external, ISO-accredited audit team, receive a formal certification.

Whether or not a company aligns to ISO 41001, a comprehensive management system will provide the formal structure needed to plan, implement, check and correct, and review facilities-related objectives and targets, action plans, policies, and procedures.

Standard operating procedures (SOPs) should also be included as part of your company’s FM strategy. These management-mandated documents provide maintenance personnel with detailed instructions on how to perform specific (and often highly technical) maintenance tasks. These documents ensure that maintenance work is easily replicated, consistent, safe, and risk-appropriate.

Why invest in a facility management strategy?

So why is having a strong FM strategy important? Aside from strengthening operations, it can also have far reaching financial benefits.

Here are the top reasons you should be investing in yours:

Preserves the functionality and lifespan of physical assets, including buildings, machinery, equipment, and infrastructure
Prevents malfunctions or breakdowns of physical assets and systems
Allows management to attend to building-related and allied issues in a timely manner
Allows for optimal, sustainable energy usage and utility management
Optimizes the space usage and flexibility
Ensures the health and safety of everyone within a facility
Improves the productivity of employees in the workplace
Facilitates the wellness and morale of employees
Encourages smooth operations and processes
Contributes to lower operating costs and can have a positive impact on your financial bottom line

Funding your facility management strategy

For many manufacturing and distribution companies, finding the funds to allocate to their FM strategy and execution can be challenging. When traditional funding options (bank loans and LOCs) are not available, an alternative is needed.

Invoice factoring can be an excellent way to leverage the power of your outstanding accounts receivables to access funding sooner.

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

Access the complete guide.

Facility management teams have a lot on their plates, as theirs is an ever-changing, complicated, and evolving world. Investment in proper FM strategic planning and execution can add significant business value for any business owner or CFO.

Do you (or your client) need access to accelerated cash flow to invest in your facility management strategy and execution?

Liquid Capital works with many manufacturing and distribution companies. Contact one of our Liquid Capital Principals to discuss how to accelerate funding for your business.

Inspirational quotes for entrepreneurs from unlikely sources

julio 12, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

Everyone has moments of doubt and uncertainty in their professional lives. These inspirational quotes for entrepreneurs will give the boost you (or your client) need to achieve great things.

Whether you’re going at it solo or have a team behind you, it’s common to hit motivational slumps when trying to keep up with the demands of running a business. Turning to other successful business professionals can give a much-needed dose of inspiration that you and your team need to achieve great things, make big moves and outlast the competition.

However, sometimes the wisdom that resonates with us the most comes from the most unlikely of places.

Keep reading to discover some nuggets of inspiration to give you (or your client) a boost of motivation.

“Nobody is gonna hit as hard as life, but it ain’t how hard you can hit. It’s how hard you can get hit and keep moving forward…That’s how winning is done.”

— Rocky Balboa, Rocky Balboa

Can you hear Eye of the Tiger playing? The iconic boxing franchise Rocky gives us many moments of inspiration to carry with us throughout our professional and personal lives.

In business, and life in general, things don’t always go according to plan. In fact, it rarely ever does. But hitting an obstacle (or getting hit by an obstacle) doesn’t define you. It’s how you respond to it and move forward that does. Having the agility to pivot when needed, the strength to endure adversity, and the confidence to believe in yourself will lead to success.

«You are braver than you believe, stronger than you seem, and smarter than you think.»

— Christopher Robin, Winnie the Pooh

This may seem like an unlikely source of inspiration for business professionals. Still, in Winnie the Pooh, Christopher Robin reminds us of three important characteristics that lead to success: bravery, strength, and intellect.

Often, we can get caught up in the routines of our daily work lives, making it harder to recognize the extraordinary things we do every day, and what we’re truly capable of. Yet, you can overcome internal struggles and achieve greatness — and it starts with celebrating your bravery, strength and wisdom.

“Take a step back… and say, ‘What can I do today that will make a difference?”

— Bruce Dickinson, Iron Maiden

Who would think that a heavy metal musician could shine a light on the importance of making a difference in the world? However, in his TED Talk, Bruce Dickinson reminds us to do something worthwhile, every day.

Whether within your office, for a client, or in the community, taking the initiative to make the world a better place has wide-reaching benefits. Finding unique ways to show appreciation for employees and clients or providing support during challenging times can leave a lasting impression and set you apart from others.

Some of today’s most innovative businesses are using their companies to do more. They are using their products to help others and are investing in the environment, all while gaining a competitive edge and increasing sales.

«When life gets overwhelming, remember to just keep on swimming»

— Dory, Finding Nemo

What could an animated blue tang fish teach us about perseverance? Well, if it’s Dory from Finding Nemo, quite a lot!

No matter what happened to her (or what she forgot along her journey), being thrown off course didn’t deter Dory from pushing through and forward on her mission.

Having the perseverance to keep moving forward, even when things seem overwhelming or stressful, is an important trait for overcoming obstacles. So if tasks, obstacles or challenges are piling up, just remember — keep on swimming!

«You’ve got to try and take things to the next level, or you’ll just get stuck in a rut.»

— Ozzy Osbourne, Black Sabbath

At this point in rocker Ozzy Osbourne’s career, chances are you can think of a situation or two where he definitely took things to the next level. And despite his wild antics, Ozzy has been able to remain relevant and create enduring music.

You don’t need to resort to some of the dangerous, bizarre or ridiculous acts that Ozzy has but you still have the opportunity to go outside of your comfort zone and break free from your operational ruts. Trying new things to help evolve your business can be scary, but if you don’t allow fear to take hold, you have the potential to achieve great things.

“Do, or do not. There is no try.”

— Yoda

When training the next generation of Jedi, Yoda imparts that “trying” implies a chance of failure and leads to doubting one’s power.

While you may not have Jedi powers, it’s important to remember this when faced with a challenge. Success is a mindset, among other things. Therefore, putting yourself in the frame of mind to succeed from the onset is the most important first step you can take on the path to greatness.

Up next: Looking to set your business apart from the crowd? Read how these innovative businesses are making a difference.

Use alternative funding for business growth and reach new heights

julio 6, 2022/en Sin categorizar, Invoice Factoring/por Helen Burnett-Nichols

Finding funding for business growth isn’t always easy. With invoice factoring, you can use your outstanding A/R to accelerate your cash flow.

For every business, the path to achieving growth and success looks a little different. Whether you’re reaching new heights because you’ve branched out into a new market, increased sales, added a new service or you’ve acquired a new partner, odds are you have a common thread in your journey: the need for working capital.

At some point, you may need to secure funding for your business growth. Traditional funding options are one route, but you may not want to commit to the long terms — or may not meet the bank’s lending criteria.

Using invoice factoring can help accelerate your growth plans no matter how and why you’re expanding your business. Instead of a last resort funding option, it is an important tool for businesses that allows you to benefit from the strength of your customer credit and your accounts receivable.

Here’s a look at how invoice factoring can help you or your client achieve success at any stage of growth:

Organic growth

organic business growth

Many businesses choose to evolve in reaction to organic demand or as new opportunities arise. Perhaps you’re ramping up production or expanding your physical footprint. Maybe you’re improving your internal capacity or processes. While organic growth is often a manageable way for businesses to expand, it often requires capital commitments.

If this is happening while customers aren’t paying their invoices on time (maybe even as late as 90 days), you may be feeling a cash crunch. Invoice factoring is one way to alleviate the strain, turning your near current assets (your invoices) into cash — allowing you to access capital quickly.

When you work with Liquid Capital, you gain more than cash, you gain a strategic partner. Your Liquid Capital Principal acts as a trusted business advisor, providing valuable support, information and advice as you navigate the opportunities and challenges of growing your business.

Strategic growth

Strategic business growth happens when you’re targeting new opportunities for your business, often with your eye on the long-term — whether you’re launching a new product or moving into another market.

For broadcast systems engineering and consulting firm Best Broadcast, a successful launch set the stage for tremendous growth with new business opportunities to work with major companies.

Best Broadcast was suffering a cash crunch and needed funding for its business growth after purchasing an integration company and pivoting into the audiovisual industry.

But this venture came with a number of cash flow challenges. The company struggled with hundreds of thousands of dollars tied up in accounts receivable — as clients often paid invoices at net 60 days. This delay significantly disrupted the cash flow cycle.

Liquid Capital’s invoice factoring services allowed Best Broadcast to alleviate day-to-day working capital concerns. The solution proved to be a more economical option during this growth phase than offering early payment discounts to clients, and helped facilitate Best Broadcast’s strategic evolution.

Growth via merger

Your company might be considering acquiring or partnering with another firm in order to grow. But funding the acquisition may mean seeking a loan from a traditional financial institution or lender, which can be a challenge for some newer businesses.

That’s where invoice factoring shines. Unlike loans, the factoring process doesn’t need to consider how long you’ve been in business, and firms are not required to have detailed financial statements or financial projections in place. Rather, your eligibility for funding depends on the credit-worthiness of your customers and current outstanding accounts receivables.

Accessing working capital via the invoice factoring process also means that as your company grows, your calculation around giving up equity to additional shareholders, looking for new investors or taking on loans from your personal network will change for the better.

Accelerated growth

In some sectors, the timing is right for quick growth to occur because of favorable economic factors, unforeseen market conditions or sudden opportunities. However, you or your client may need to access additional working capital quickly to fund those opportunities.

Perhaps you operate a staffing company and suddenly are presented with the opportunity to take on a new contract, but need to hire new employees to service it. In this case, you may be paying subcontractors or staff biweekly, while waiting 30, 60 or 90 days for your invoices to be paid by your end customer.

Working with an invoice factoring company can give you access to the funds you need now to take on new contracts and increase your payroll.

New opportunities. New heights.

Invoice factoring and alternative funding solutions can help companies that are on a growth trajectory to quickly secure a reliable source of working capital. When you accelerate your cash flow, you’re able to meet your financial obligations, take advantage of new business opportunities and alleviate the stress of ensuring access to working capital.

“Our clients value how we strive to be at the top of our game, giving them the opportunity to grow and prosper. We don’t lock our customers into long-term contracts or exit fees. When they no longer need our services, we simply ask for 30 days notice. We believe in helping our clients grow, wherever that takes them.”

We’re here to help you grow. Liquid Capital Principals provide funding when you need it, for as long as you need it. Best of all, you won’t be locked into a long-term commitment to factor your invoices, and you’ll have someone to talk to – and rely on – who understands your business.

Accelerate your cash cycle with smart cash flow management tips

junio 30, 2022/en Sin categorizar, Invoice Factoring/por Helen Burnett-Nichols

Overcome cash cycle droughts with these savvy 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.

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

junio 21, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

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

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: what you need to know to grow

junio 15, 2022/en Sin categorizar, Invoice Factoring/por Sarah Schoepfer

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

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.

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

Will my business qualify for accounts receivable factoring?

junio 1, 2022/en Alternative Finance, Sin categorizar, Cash Flow, Factoring, Invoice Factoring/por Mark Glucki

Using these quick checklists will help to make sure your company, sales and invoices are the right fit 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)

Photographic Laboratories
Printing, Publishing Services & Paper Suppliers
Professional Services
Medical Sales
Security Agencies
Service Industry
Small Business
Software
Staffing Companies & Temporary Personnel Agencies
Telecommunications
Technology
Wholesale/Distribution

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.

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?