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For start-up businesses and entrepreneurs, few things are more important than maintaining positive cash flow. It’s not an easy task, especially when mature business customers often wait until payable items are 90 days overdue before writing a check. However, there are a variety of ways savvy business owners can keep money coming in the door. From industry-specific solutions like California commission advances to factor invoicing, here are a few unusual ways that business people keep cash flowing. Set Up Business Credit Line When business is going well, consider establishing a line of credit down at the local bank. You don’t have to need credit at the moment. In fact, it’s better if you don’t. But having access to a healthy line of credit in the event that accounts payable outpace accounts receivable means you can continue to do the things necessary to keep your business running without resorting to drastic measures. The credit line isn’t a license to spend; it’s a safety net for if and when you need it. Offer Payment Incentives Many mature businesses will wait until accounts are 90 days overdue before submitting payment. It’s not something experts recommend for small businesses that may not have well-established service providers. However, small business providers may be able to get some of their largest customers to pay sooner by offering incentives for quick payment. For example, knock 10 percent off for paying within 10 days of receiving an invoice. Invoice Factoring In some industries, like trucking and freight services, staffing, and oil and gas services, companies can sell their accounts receivable to invoice factoring companies that take a cut of what’s owed. These organizations pay up front and collect when the businesses that owe up pay their bills. This allows a business owner to have quick access to cash without taking on debt. It’s positive cash flow without a negative balance sheet. Commission Advance Services Specifically designed to assist real estate agents and brokers, commission advance companies front the money due on specific real estate transactions. Because real estate closings don’t always happen on a consistent schedule, but expenses do, a commission advance can mean the difference between marketing a current property or waiting around for a deal to close before working on the next deal. Cash flow is king for budding business owners. Whether you’re a real estate agent or a hardware retailer, when bills come due, you need cash to keep your business running. Whether using traditional means or industry specific solutions like California commission advances, there are several ways to maintain positive cash flow.
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