One of the main reasons why companies fail in a recession is they panic. While it is understandable why so many small to medium sized business panic when the economy goes bad, there is still a lot to be said for maintaining a strong business plan and sticking to it in the worst of times. A company that plans for contingencies is more likely to be ready for a recession, while the company that does not plan for a slow economy will find itself panicked when a recession does hit. Aside from paying ongoing vendor bills, most companies become very concerned about making payroll when a recession hits.
During a recession, cash flow starts to slow down because of the decline in overall sales and the increase in past due invoices. The aging reports show sufficient cash to keep operations intact, but the increase in late payments means not having the funds when the company needs them. As receivables start to roll in later and later, the company is forced to explore a list of payroll options and none of them are very pleasant. In the end, the company needs to make the right decisions if it is going to survive the recession and become a strong company.
A company that has been monitoring its growth is able to add personnel only when it is absolutely necessary. The reason for this is to prevent overspending on payroll and keep the company streamlined in case of a recession. But when that recession hits and those past due invoices start piling up, even the most efficient staff starts to become a financial burden the company can no longer bear. The company starts to consider layoffs, and that can have many long-term negative effects on the organization.
Layoffs destroy the morale of the staff that actually gets to keep their jobs because they are not sure if they are next to be let go. Your company also puts a huge dent in its ability to maintain productivity when you are forced to let key personnel go. In an staffing situation where every employee has an important job, layoffs can have a domino effect that is almost impossible to stop. The company needs to find a way to prevent using layoffs as a way to relieve pressure on payroll.
Your employees read the newspapers and watch the television news. They see companies all around your area laying employees off and even closing their doors. To try and maintain company morale, you may decide to cut back on employee hours instead of laying employees off. But the problem is that any kind of payroll changes are going to be met with instant rumors and speculation. Your staff will consider cutting back on hours to just be the first step and everyone will be waiting for the layoffs to come and the doors to be shut for good.
The frustrating thing is that you would not have to consider cutting back hours if you could just fix your cash flow problems. Your company would break even at best, but the positive impact to morale when you allow your employees to keep their jobs intact during a recession would be immense. When the recession is over, your staff will work twice as hard and become even more productive because they have the ultimate faith in your company's decision making abilities. The key is to find a way to meet payroll during a recession that allows you to keep your staff intact and your company open for business.
A company that funds receivables is one that utilizes your outstanding invoices as collateral to stabilize your cash flow. Instead of worrying about when your customers will pay their past due invoices, you can expect to get paid on or before the due date of each invoice. The only fees you would have to pay would be lending fees that are disclosed up front. Capital Credit is the top receivables funding organization in the world for small to medium sized businesses. We have the custom program for you and we do not charge any hidden fees.
When you sign up for a receivables funding program with Capital Credit, your aging report becomes a cash flow report. We do not charge any facilities fees, lock box fees or per invoice minimums. We take your outstanding invoices and use them as collateral to advance you the cash you need to meet your payroll obligations. We use your customers' credit scores to approve invoices and not the credit score of your company. That means that we can help you maintain a strong cash flow even if the recession has ruined your company's credit.
Your company worked and planned hard to be ready for a recession, which means you cannot allow past due invoices to ruin your plans. Funding receivables with Capital Credit will allow you to keep your staff intact and focus on growing your business while the competition is struggling to survive. The morale boost your employees will get when they realize that their hours are not being cut and they are not losing their jobs will be significant. The increase in productivity you will get from this will help your company to take over new market share and come out of the recession stronger than ever.
The entire process starts with a simple, online application at the Capital Credit website. We have helped companies all over the world in a variety of industries. We have the experience and resources you need to meet payroll, even in the most challenging of economic times. We can help your company even if you have tax liens against, and even if your company has just come out of bankruptcy. We have the services you need to meet payroll and keep moving forward.
Instead of panicking when a recession hits, your company can be prepared because you will have your receivables funding program with Capital Credit already in place. You can do this by contacting us right now and letting our financial experts explain the process to you and get your company started. We will be your competitive edge in a recession, and in the best economic times you have ever seen. We will help you to meet your payroll needs and have the stable cash flow you need to grow your company when everyone else is just struggling to stay in business.