Business Cash Flow Receivables Inventory Finance 7 Park Avenue Financial

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Managing (And Solving) Business Cash Flow And Receivables And Inventory Finance Challenges In Canada
What is the Key to Managing and Understanding Cash Flow?

 

 

YOUR COMPANY IS LOOKING FOR BUSINESS CASH FLOW

RECEIVABLE INVENTORY FINANCE SOLUTIONS

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the biggest issues facing business today

ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

Business cash flow and working capital.  U.S. financier Harold Geneen once said that you can make almost any mistake in business and be forgiven or remedy that, but 'when you run out of cash they take you out of the game‘. We agree!

 

So therefore the financing and management and solutions involved in receivables and inventory finance are key to the success of the Canadian business owner and financial manager.

 

THE PROFIT VERSUS CASH FLOW DIFFERENCE

 

While profit is the measurement of the income statement many challenges and problems arise when you are not managing cash and working capital. It's a constant juggling act, don’t you think?  There is a great analogy about how you juggle the bowling pins of business to generate profits but it’s the spinning knives that determine cash balances and the pitfalls that come from that. It seems we're full of sayings and analogies today...

 

Business cash flow is of course the lifeblood of your company's operations. The difference between cash and cash flow is essentially the difference between your balance sheet and income statement.  It's really a presentation of dollar amounts at any point in time, plus the changes in those dollar amounts that decided your working capital financing performance while identifying needs.

 

It the changes in your working capital accounts that really determine your cash flow. While sales generate cash, but you use that cash to purchase goods and services, pay your staff, rent, utilities, loan payments, etc.

 

HOW DOES ACCOUNTS RECEIVABLE AFFECT CASH FLOW?  INVENTORY ALSO?

 

As sales fluctuate and assets and liabilities change the business owner and his or her management team have the ability to spot problems in working capital/ cash flow. As receivables are built up, hopefully, commensurate with sales! cash flow goes down, and the same with the inventory. Inflows of cash come from collection and efficient turnover of a/r and inventories/

 

It's a constant balance act as every business owner knows and the alternatives can be very costly. You can of course increase your own equity in the firm, but that’s costly and means giving up some measure of control.  Asset sales are also, generally, not desirable.

 

4 WAYS TO INCREASE CASH - FINANCING CASH FLOW

 

So we have made it clear that you can increase cash by one of several methods:

 

1. TAKE ON DEBT

 

2. INCREASE OWNER EQUITY BY OWNERSHIP DILUTION

 

3. SELL MORE AND COLLECT MORE - Convert non-cash assets such as A/R and inventories to cash

 

4. REDUCE COSTS

 

Suffice to say that number 3 is our favourite!

 

ASSET TURNOVER IS THE KEY-  How to increase cash flow & understand working capital changes

 

When your sales are growing and you turnover your receivables in a proper manner you can avoid a cash crisis. If you don’t have proper inventory finance of receivable financing facilities in place vendor relationships can get severely strained.

 

There are solid financial solutions for firms struggling with profitability or for those Canadian business owners and financial managers unable to raise equity.  Bank financing might be available, but many times it is not.  Even growth, as we have said in the past, can be a double-edged sword. Great companies disappear when their cash reserves or financing procedures become insufficient to finance their growth.

 

SOLUTIONS TO BUSINESS CASH FLOW

 

In Canada solutions to business cash flow, receivables and inventory finance are abundant.

 

They include

A/R Financing

Inventory Loans

Access to Canadian bank credit

Non bank asset based lines of credit

SR&ED Tax credit financing

Equipment / fixed asset financing

Cash flow loans

Royalty finance solutions

 

CONCLUSION - RAISING WORKING CAPITAL

 

Businesses need to understand the cash flow statement. It's that 3rd part of your financial statements that shows you where the cash came from and where the cash went. It ties the balance sheet and income statement together showing how you have funded your business and succeeded, or not succeeded in asset turnover.

 

Invest the time in understanding your financials. Understanding inventory and accounts receivable on the cash flow statement is key to ultimate cash flow success and achieving optimal business capital. ' NWC', or net working capital can be quickly calculated by business owners - simple subtract current liabilities from current assets. It's a quick snapshot of whether you are winning in the working capital game

 

Speak to a trusted, credible and experienced Canadian business financing advisor for tips on finance on how you can manage, and solve business cash flow and operating working capital challenges.

 

Click here for the business finance track record of 7 Park Avenue Financial

 

7 Park Avenue Financial/Copyright/2020

' Canadian Business Financing With The Intelligent Use Of Experience '

 STAN PROKOP
7 Park Avenue Financial/Copyright/2024

 

 

 

 

 

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil