Cash Flow Management Mistakes Throttling Small Business Growth, Business Funding Specialists Say

Leading factoring company Charter Capital reports many financial woes small businesses experience can be traced back to preventable cash flow management mistakes. The organization draws on the Federal Reserve Banks Small Business Credit Survey and links 90 percent of emergency funding requests back to cash flow management. Many of the issues seen can throttle business growth during strong periods too, representatives note. The full report, “7 Cash Flow Management Mistakes Businesses Should Avoid,” is now live on CharterCapitalUSA.com.
Gregory Brown, co-founder and executive manager of Charter Capital, says it’s not always about bringing in greater profit, but what businesses do with the revenue they receive, that makes the difference in who gets ahead.
“Practicing good cash flow management strategies is essential,” explains Brown. “Business owners need to be on top of their invoicing practices to accelerate incoming payments and be mindful of which payments are going out and when they’re going out.”
Brown says many small businesses aren’t monitoring their inflows and outflows, which can further complicate issues. Although they have an idea of what should be in an account at any given time and base their payables around that, they’re not accounting for payments that come in slower than usual, slow periods, emergencies, and so forth.
Specialized business finance software makes tracking easy, plus can help small business owners predict their cash flow better. Businesses on a budget can get started with a simple Excel spreadsheet too, contends Brown.
“One of the best things business owners can do is use their data to start predicting weak or slow periods,” Brown explains. “If you know you’re going to hit a bump, you can take corrective action before it becomes a problem.”
Business owners who miss this step often wind up accepting high-interest or high-fee funding options out of desperation, says Brown, which only sets them farther back and keeps them tied in a debt trap. Meanwhile, savvy business owners see the issue and take steps like selling surplus inventory and slowing their purchases. Accelerating payments through invoice factoring is helpful too. With this strategy, business owners no longer have to wait to get paid by their customers; instead, they get immediate payment on B2B invoices from a factoring company like Charter Capital. This means the business is always moving forward and can grow, free from taking on additional debt.
Those interested in accelerating their cash flow through factoring or learning more can start with a free rate quote at CharterCapitalUSA.com.
Source: Charter Capital Holdings LP