Income statements, balance sheets, cash flow analysis…all priority items when owning or managing a business; but how many people really know how to not merely read them, but to improve them?

We all know the stories of Enron and MCI, former darlings of the investment world that simply fabricated financials to convince employees, investors and customers they were successful when in fact they were bankrupt.  Unfortunately for the thousands who lost millions of dollars in these companies, the management failed not only in their responsibility to tell the truth, but also in their responsibility to be fiscally responsible.  Many companies suffer through periods of downturns, which result in less than desirable earnings or even losses.  The companies that survive such times are the companies whose management realizes that finding ways to improve the three priority items above are the keys to survival.

By improving I don’t mean simply typing in new numbers that suit you.  Improvement is decreasing the cost of your dollar while increasing the return on your investment.  There are many reasons a company may find its financials a little less than desirable.  It might be due to a slow paying customer, outdated equipment, inability to attract new customers due to a lack of resources or heavy debt service.

In the past, businesses that needed money for operations, growth or new contracts faced a difficult situation.  In order to attract bank loans or investment funds, the financials had to be so strong that it would appear the business didn’t require the loan or investment funds.  Those businesses truly in need of the funds found themselves on the outside of attracting new funds on an as needed basis.  Of course, this meant many businesses resorted to creating financials in order to simply attract the funds needed just to take the business to the next level.

Today smart businesses have learned that receivable-based financing is the number one way to improve all three key components of the financial reporting.  Because money is funded based on actual sales and financial requirements, a business no longer has to struggle with true financials versus money requirements.  Most importantly, using the receivable-based funding approach, the financials dramatically improve immediately, from cash flow to income statement, to money in the bank on the balance sheet.  Financials are now the reporting tool they always should have been for management, not an anchor preventing necessary funding.

At Alternative Funding Options, we understand what it takes to operate businesses of all sizes and we tailor your funding solutions to your needs.