How Do You Deal with Production Increases?

The biggest obstacle to business success is not poor product development or lack of management control. In simple terms, it is a shortage of cash and the inability to maximize cash flow. Whether due to rapid growth, seasonality, or a long business cycle, the end results are the same: pressure, underperformance and the inability to grow. The recent Paris Airshow, where suppliers voiced worries about the amount of cash they can access to accommodate sudden changes in demand from their customers is a perfect example. Airbus and Boeing plan to raise production of their single-aisle planes by 25% in 2017-2018 and may raise the rate significantly higher in upcoming years. This raised protests by suppliers who need time to ramp up to the higher level of productivity first before making commitments to higher targets. For large companies already supplying parts, deciding to ramp up production is a slight gamble, but for smaller suppliers and for those specializing in very specific engine parts, a twitch in the market could have dire consequences. Securing adequate financing at critical moments for operations and growth is one of the biggest hurdles business owners face. Suppliers need flexible financing solutions that allow them to access immediate cash to grow, restructure, hire additional employees, or even to fund payroll. Many small and medium-sized companies are unable to access capital through banks, and are unaware that other financing options exist. Supporting business growth with accounts receivable finance Receivable finance is one tool in the company’s cash management toolbox that can support significant business growth and help achieve business objectives by improving the cash conversion cycle. In a nutshell, accounts receivables financing allows a business to gain liquidity through its invoices. Instead of waiting the typical 30-90 days for an invoice to be paid, a business can use its accounts receivable as collateral and get advance much faster. Converting receivables into cash by reducing the day sales outstanding (DSO) means releasing working capital trapped in trade receivables and creating additional capacity within the business to self-fund growth. Factoring, one of the trade finance solutions traditionally used by selling organizations to get instant access to cash has significant disadvantages including lack of control and limited scalability with overall costs exceeding 30% in annual interest. Furthermore, factoring is mostly limited to domestic financing and not suitable for companies that have customers in different countries. PrimeRevenue’s Receivables Finance solution allows suppliers to sell their invoices for early payment well before the actual due date and, in most cases, without any involvement from or disclosure to their customers. A true sale of your receivables, not factoring or a loan, PrimeRevenue’s Receivables Finance solution automatically handles all transactions across your multiple customers and provides companies with additional cash flow in different countries and currencies. PrimeRevenue has the only global receivables financing platform that is a true multi-bank solution. This unique solution allows a company that wants to sell their invoices to multiple banks to use a single platform to manage the entire process from upload, to sale and to maturing payments. This puts the control of the receivable sale in the hands of the seller while the system automatically manages the receivables settlement transaction and the reconciliation of the payments in multiple currencies. Contact us to find out how to join PrimeRevenue and generate cash flow today.