How To Decide If Financing Receivables Is a Solution for Your Working Capital Funding
We call it the R R factor. And we are not discussing rest and recuperation! The R R factor gives you a sense it’s once again time to take into account whether a newer, popular way of financing receivables will be your working capital funding solution.
We’re going to supply you with a quick but easy and powerful tool to discover if the earnings challenges need to be addressed more positively. It’s the receivables to revenue ration – hence the word R R. First, require a year-end balance of A/R, which is, of course, your uncollected sales revenue at that time soon enough. Then determine how weeks of sales to display. Calculate this ratio historically along with an approach to determining whether your cash flow and dealing capital requirements are changing.
So what makes business address the challenge of working capital funding when it’s as challenging as always to borrow. …
