A FRESH PERSPECTIVE ON TIME AND MONEY IN YOUR BUSINESS

 

Today’s competition means businesses are seeking every advantage possible.

In this article we discuss the potential many businesses have and take a closer look at how the cash flow cycle works (or doesn’t) for their business:

How often do we hear someone say, “Well time is money isn’t it”

For businesses today it is certainly true, and in fact the more effectively an organization can manage the money flow, the better the result.

For those businesses that are in a growth phase, or plan to grow, increasing the speed of the cash cycle can allow a greater capacity to build the business.

As a financial term and measure, it’s simply the number of days between purchasing raw materials (or providing a service) and receiving the cash in payment. The lower the number, the more effective the business is in converting assets and effort into reward.

In this illustration, we compare a business with typical trading terms of 30/45/60 days with one using an invoice discounting cash flow product: