Alternative Line of Credit Can Help with Poor Account Receivable Turns
Sometimes, you can turn upsetting circumstances around with laughter. However, poor account receivable turns is no laughing matter, and an alternative line of credit may be the only thing to help turn your situation around.
Account receivable turns can be a predictor for the health of your business. Make sure yours projects success, with the help of an alternative line of credit.
What You Need to Know About Account Receivable Turns
Since they are likely your primary source for fast business cash, accounts receivables must be the focal point of your planning and analysis to keep your company strong. There are numerous accounting methods to do this but one of the easiest is to calculate your account receivable turns.
Account receivable turns provide an ideal way to measure how well you use your assets and how effectively you extend credit and collect debt. You can determine the number by dividing the value of credit sales by the average accounts receivable. Many businesses calculate this number yearly, but to get a clearer picture of your business condition, you may want to do it quarterly or monthly.
Having a good ratio may indicate that you have great customers who pay their debt quickly or that you have strict collection policies which may be driving customers away. A poor number may mean that you have a slow collection process or high risk clients so you will need to reassess your strategies.
Where Can You Go for an Alternative Line of Credit?
With a poor account receivables ratio, you may experience frequent cash flow problems. One way to manage this, until you put the right policies in place, is to get a line of credit from Financing Solutions (www.financingsolutionsnow.com).
Financing Solutions is one of the only alternative financing companies to offer a line of credit program that is as competitive as those from a traditional bank. Most importantly, their turnaround time for getting a line in place takes less than 48 hours. This is vastly different than other lenders that can take several weeks or more.
How to Turn Your Business Around
When your business is struggling, you need to fix things fast. Letting a dire condition linger and fester will make it harder to deal with later. Just know that there are always alternatives.
One step you may want to take is to have a real, honest dialog with your employees. Being on the front lines with customers might have given them insight on ways you can improve. If you treat them right by always making payroll and providing opportunities for advancement, and allow them to have input without consequences, you can inspire loyalty and motivate them to want to help.
You should also meet with key stakeholders to discuss your plans for getting out of financial difficulty. Trying to hide your financial problems doesn’t work. It’s likely that they already see the signs. It’s vital to talk with your vendors, bank and maybe even customers. Explain that you have a strong handle on the situation and clear goals for the future. A little transparency can go a long way to ease fears.
The best way to turn your business around for the better is to contact Financing Solutions. They can help with the fast business financing you need to survive and grow.