You've got a great business concept, you're doing everything right, but for some reason your profits haven't increased as quickly as you had hoped. What gives? If this is happening to you, it's possible that your company's working capital could be limiting your growth. In this article we'll cover the basics of accounts receivable financing and discuss how small businesses can take advantage of this financing option to boost their profits while reducing costs.

1. How to Increase Your Profits
with Accounts Receivable
Financing
By – M1Xchange.com

2. Introduction
You've got a great business concept, you're doing everything right,
but for some reason your profits haven't increased as quickly as you
had hoped. What gives? If this is happening to you, it's possible that
your company's working capital could be limiting your growth. In
this article we'll cover the basics of accounts receivable financing
and discuss how small businesses can take advantage of this
financing option to boost their profits while reducing costs.

3. The Basics of Accounts Receivable Financing
Accounts receivable financing is a type of factoring that
allows businesses to borrow money against the future
value of their accounts receivables. Accounts receivable
financing can be useful for small businesses when they
need capital now, but it comes with some drawbacks and
should only be used in certain situations.

4. Start with a Strong Financial Foundation
Before you apply for an accounts receivable loan, make sure
your business is in a strong financial position. Make sure it is
profitable, and do not take on more debt than you can handle.
Your business should also have a good credit rating.
If your company has these qualities, it will be easier for you to
get approved for an accounts receivable financing plan.

5. Manage Your Working Capital Efficiently
This section will teach you how to manage your working capital efficiently.
Working capital is the money you have available to pay bills and make
investments in the business, which can be done even if you don't have enough
cash in the bank.
• Reduce Your Accounts Receivable
Accounts receivable refers to all of your customers' unpaid invoices. You need a
certain amount of accounts receivable to operate your business, but it's important
not to let them get too high so that they become an impediment for growth and
profit potential. The best way to manage these payments is by ensuring that
everyone pays their bills on time. In fact, one way businesses use A/R financing is
by offering incentives for early payment or discounts for early payment (e.g., two
days before due date). This encourages clients to pay their debts as quickly as
possible rather than waiting until closer towards deadline when interest rates are
higher

6. Control Your Cash Flow Cycle
Control your cash flow cycle by using a cash flow management software. With
this you can:
• Create and manage a full set of accounts receivable invoices for your
business, including automatic emailing and SMS text reminders, line-by-line
payment histories, and more.
• Use an integrated check writer to process checks on site or in the cloud.
• Access real-time reports that show how much money is coming in each day so
you can see how many days it will take before you get paid. This gives you
control over when customers pay their bills—and how much they owe before
they do so (versus waiting until after the fact).

7. Conclusion
This is the final step in your journey of mastering accounts
receivable financing. You now know the basic principles of how this
type of financing works, and how to apply them to your business.
It’s important that you understand the different types of financing
available so that you can choose which one would work best for
your company. This knowledge will allow you to make better
decisions when it comes time for applying for an account receivable
loan or line of credit with a financial institution or lender.

8. ThankYou