You need to make purchases on a regular basis from a supplier
or various suppliers. However these purchases are creating
a heavy short-term burden on your cashflow.
Without good cash flow, you can have difficulty financing
day-to-day operations such as paying employee salaries and
purchasing the inventory necessary to generate sales. Poor
cash flow can make it especially difficult to invest in
purchases needed to propel your company’s future growth.
While understanding the concept of cash flow and the strategies
for improving it is easy, putting that understanding into
action can be more challenging.
Cash flow simply refers to the movement of cash into and
out of your business. Typically, money comes into your business
in the form of cash received from customers at the time
of sale, cash received upon collecting accounts receivable,
and income from other activities, such as the collection
of sales commissions. Cash flows out of your business to
fund everything you purchase to run your business: inventory,
raw materials, payroll, expenses, rent, utilities, interest
on loans, equipment lease payments, etc.
With Trade Credit - your cash flow problems are solved.
The supplier or suppliers supply goods or services to your
company on Finance & Credit Terms. The suppliers are
happy because they have a stronger balance sheet. You are
happy because you have made sales that would not be possible
without trade credit finance. And, we’re happy because
we were able to participate in the opportunity and profit
as well. In short, everybody wins.