Money is tight. We all know this. But, there are ways to loosen the encroaching noose, if not cut it down from the rafters completely if you're unable to find relief anywhere or don't (or can't) go to the banks. The Associated Press recently gave a shout-out examination to an online service called the Receivables Exchange. I could paraphrase the AP's explanation of the service, but instead I'll just give you this:
Here’s how it works: Company A is owed $1,000 by Company B. Company A posts its invoice on the Receivables Exchange, where investors can bid for it – for an amount below face value. Company A chooses among the bidders and gets the cash it needs, sometimes within a day. When Company B pays the invoice, the Receivables Exchange handles the transaction and collects a commission.
If Company B doesn’t pay, then Company A would have to pay back the investor. But Nicolas Perkin, the president of the Receivables Exchange, says companies tend to sell invoices from their customers that have a solid payment history. That reduces the risk. Selling invoices allowed Mason-Grey to improve its cash flow, and it was able to hire 20 more staffers.
Obviously, though, if you have no bearings or clue about managing your cash flow, you should get that squared away first. If you don't know when a bill will be paid -- and there are companies around that can help you track this -- you're potentially just making things far worse by having more and more piles of money that are due in but you don't know when, or also bad, how much.
Or, as the AP suggests: "Sometimes having healthy cash flow means holding onto the cash that's coming in for a longer time."
It's definitely worth a read since, you know, money is tight. Right?
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.