An Advance on Invoices Can Make Your Holidays Bright

Author: Rieva Lesonsky | December 22, 2016

Small business owners have lots of expenses at year-end. From holiday parties and unexpected tax payments to business gifts and employee bonuses, how can you be prepared for it all? Consider an advance on invoices.

First, start at the beginning by setting a budget. Year-end expenses can quickly get out of hand if you aren’t carefully tracking them. Between holiday season distractions, you and your employees taking time off, and general hustle and bustle, you might not be paying as much attention as usual to your business budget. Sit down and think about upcoming expenses through the end of the year, then create a realistic budget.

Once you’ve got a budget in hand, create a cash flow projection through the end of the year. (Read more about understanding and using cash flow statements.) For some businesses, cash flow surges during this time of year. For others, business is slow as clients take time off. If you own a seasonal business, you may be dealing with additional operating expenses that can offset your profitability. Will your cash flow be enough to cover year-end expenses?

If your cash flow won’t cover your year-end costs, develop a plan for how you will pay them. Be sure to think carefully about which method makes the most sense for your business in the long term. For example, you may be able to use business credit cards for some expenses, such as employee gifts or the catering for your annual holiday party. However, this is not always the best option. A better solution for many small business owners is getting an advance on invoices. Also called invoice financing, this simply means getting an advance based on unpaid invoices.

How an Advance on Invoices Works

Getting an advance on invoices is simple and fast, making it a great solution for unexpected business expenses at this time of year. For instance, with Fundbox invoice financing, you can just create a free account, choose which unpaid invoices you’d like to clear, and get the money deposited in your account right away.

Even if you’ve planned for year-end expenses, last-minute costs have a way of springing up at this time of year. To prevent them from decimating your business bank account, you should always have a backup plan for covering your expenses. Getting an advance on invoices is an ideal backup plan, as it can be implemented immediately and is an easy way to quickly get the money you need.

Obtaining an advance on invoices has many advantages for a business that needs cash in a hurry. You can get the financing without having to go through a complicated loan approval process or provide a lot of documents to a bank. (That’s the last thing you have time to deal with at this time of year, right?) Instead, you can stop worrying about cash flow and start focusing on running your business.

Plan for Next Year

If you found yourself caught short of cash this year, learn from the experience. As you look ahead to the next 12 months, plan for how you can cut your year-end costs, boost your year-end cash flow, or put aside enough money for your projected 2017 year-end expenses—and rest assured that you can always use invoice financing to get out of a year-end cash flow crunch.

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