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The importance of cash flow management


Cash flow is the reason why 82% of small businesses fail according to the recent U.S Bank study, either poor cash flow management or poor understand of cash flow management contribute to the failure of business.
Cash flow management is the process of tracking how much money is coming in and going out of your business. It includes monitoring, analyzing and optimizing cash flow in order to measure how healthy your business is. You want to prevent negative cash flow especially if you have recently started your business and it is rapidly expanding. As your business grow you will need more cash to for example, hire new employees, advertising, capital investment or to maintain inventory. One of the mistakes is often that you extend credit to your customers. Invoicing is usually done on 30 to 60 day terms and it is not rare for customers to delay payment. If that is your case than invoice factoring is the right solution for you.
With invoice factoring you can turn unpaid invoices into working capital. Instead waiting, 30, 60 or 90 days you can sell you invoice for a for a couple of percent less but you will get the cash now and avoid cash shortage. Third party chases the customer for payment so you can focus on doing business and generating leads. At Emry capital we offer you factoring lines up to $5 million and rates as low as 0.25% per week. you will get a credit line based on the strength of your customers where you can fund only what you want and with transparent fees. Approvals are as fast as 24 hours.

The point is to develop and use strategies that will maintain cash flow. if you are just starting your business or you are in the business for quite some time you will occasionally need cash injections in form of a loan. Debt financing is usually used when purchasing assets. The main advantage of debt financing over equity financing is that you don't give up part of the ownership of the company and if your business is successful you will not have to share profit. For short term cash shortages many small companies use line of credits. We offer you fast and flexible line of credit up to $250,000 and with rates as low as 4.8%. Approvals for line of credit can be as fast as 20 minutes. Access to revolving line gives you financing tailor to your needs and it grows with your business.

In order to be granted a loan you need to have good credit. Business planing can help you to manage your cost and make financial analysis and forecasts. Business plan should contain overview of the industry sector, examination of the target market, competitive analysis, marketing plan and financial plan. those are the most important components. Financial plan includes your funding requirements , financial statement and financial analysis. You are supposed to attract financial institution or an investor to your business idea. In order to have positive cash flow your business always needs to have more current assets than current liabilities and a detailed business plan can help your company to stay liquid and avoid cash shortages.

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Location: West Palm Beach, FL, USA

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