Why is cash flow important?
Understanding your business cash flow and doing the right things to keep it positive are vital to running a successful company. Consistent negative cash flow (when more cash is going out than coming in) can be a warning sign that a business is struggling, which could worry suppliers, investors, and the owners themselves.
Positive cash flow, on the other hand, means your business can settle debts, reinvest, pay expenses, and establish a financial buffer against future challenges.
One of the most important elements in cash flow management is balancing when you pay your bills with when your customers and clients pay you.
Late payments disrupt your cash flow
Late payments from your customers can be a constant battle. On average, it can take 72 days to have your invoices paid [1]. Without financial support, balancing the payment terms of your suppliers with those of your business can create a shortage of funds.
To stand a better chance of maintaining positive cash flow, you should aim to increase the amount of time you hold onto cash in the business.
An American Express® Business Card could extend your cash flow
With an American Express Card, you can pay the upfront cost to your suppliers and enjoy up to 54 days² to repay the balance. By quickly releasing the money tied up in your supplier invoices, you can spend less time managing cash flow and more time managing your customers.
With no pre-set spending limit, even large purchases can benefit from the payment terms American Express offers, giving you the purchasing power you need to keep your business running.³
[1] *Invoice Berry - October 2 2017: https://blog.invoiceberry.com/2017/10/10-ways-get-paid-in-advance-invoice-due/
- The maximum payment period on purchases is 54 calendar days on Gold & Platinum Business Charge Cards and 42 calendar days on the Basic Business Charge Card, it is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date.
- If you'd prefer a Card with no annual fee, rewards or other features, an alternative option is available – the Business Basic Card.
- 3. No pre-set spending limit does not mean unlimited spending. Purchasing power can adjust with your use of the Card, your payment history, credit record, financial resources known to us, and other factors. We reserve the right to apply temporary spending limits in accordance with the Cardmember Agreement.
