Businesses often have the funding needed for growth, waiting on their balance sheets. It’s a matter of using the right tools to identify that working capital.iStockphoto
Cash flow is the backbone of any business. But another factor essential to the success of any high-growth startup is access to a strong source of working capital that offers flexibility to make strategic investments.
While most organizations in Canada rely on traditional lending sources for accessing capital, there are other options available. Paul Roman, Vice President and General Manager of Global Commercial Services at American Express Canada outlines why uncovering hidden working capital is the key to success for high-growth startup companies.
Working capital does the work for you
When searching for sources of financing to make strategic investments, businesses don’t often realize that the funding they need to fuel growth is sitting right on their balance sheets. Uncovering hidden working capital within your own organization can minimize the need to borrow and give you the flexibility to secure competitive opportunities that might have once seemed out of reach.
American Express payment solutions help businesses maximize their cash flow with up to 55 interest-free days to pay for expenses, which can reduce the funding gap between accounts payable receivables and enable businesses to put their cash to work in the interim. It’s critical to start looking at cash flow as a source of growth capital and as a tool to maximize payment arrangements and improve vendor relationships.
Keeping suppliers happy is good for business
Another benefit of optimizing working capital for your business is that it accelerates payments from buyers and suppliers. Indeed, automating those processes can maximize payment arrangements and improve vendor relationships. In addition, accelerating payments could help your business negotiate a better deal with suppliers. Striking the right balance between keeping vendors happy with swift payments and keeping enough cash on hand to invest into growing your business is a strategic stepping stone to higher growth.
Understand the value in payments
Using the right payment tools is essential for a startup in a period of accelerated growth. In recent years, the rise of innovative payments solutions has given businesses the ability to pay expenses and reconcile costs more quickly and efficiently. Alternative payment tools also offer better control and enhanced security – critical benefits for high-growth companies that can’t afford to get bogged down by manual inefficiencies, paper cheques and delayed payments. Improved reconciliation, streamlined processes and swift payment helps businesses avoid a cash flow crunch and can even uncover sources of hidden working capital.
While many startups already possess the tools for success, it’s always beneficial to have additional support and guidance when it comes to sourcing strong working capital. Uncovering hidden cash flow, maintaining strong relationships with vendors and using the right payment tools are key objectives to keep in mind when striving to achieve high growth for your startup business.
This content was provided by American Express. The Globe’s editorial department was not involved in its creation.