How to manage cash flow

Payments in. Payments out. Cash flow is the life blood of any business. What is cash flow? It’s the thermometer you use to check on the health of your operation, letting you know how much you have to pay for the ongoing daily expenses of your business. Most businesses have peaks and valleys of income and expenses, so waiting for cash flow when expenses come due can be troublesome.

How to calculate cash flow

There are several different formulas used to calculate cash flow. The most common for small businesses are Operating Cash Flow and Free Cash Flow.

Operating Cash Flow (OCF) is a measure of the amount of cash generated by a company's normal business operations. OCF indicates if a company can generate enough positive cash flow to maintain and grow its operations, otherwise, it may require external financing for capital expansion.

Free Cash Flow (FCF) is the cash a company generates after taking into consideration cash outflows that support its operations and maintain its capital assets. FCF is the cash left after a company pays for its operating expenses and capital expenditures (CapEx).

Staying positive is not just a state of mind

Keeping your business cash positive is the goal. What is positive cash flow? If you’re bringing in more money than you’re paying out, then you’re generally in pretty good shape. But there are a lot of factors to keeping your business in good shape. Why do businesses fail? According to Forbes, money management and cash flow issues are the main reasons that so many small and midsize businesses fail. Having cash on hand is a powerful resource for any business but having control of when that cash is available can be a little trickier.

Luckily, there are options out there that empower small business owners to take more control of how much cash they have on hand and when they have it. Elavon funding offers a variety of funding solutions that can take the headache out of cash flow issues, depending on your needs and eligibility (which may vary based on your industry, your debit card issuer’s limits, and other factors):

Cash flow management solutions

Next Day Funding

No matter the amount your company needs, you can access your business’ funds the next business day. Simply set up your credit card payments batch to settle by 10pm EST Monday through Friday, and your funds will directly transfer to your account via ACH first thing the next business day. Whether it’s supplies, new machinery, or an unexpected expense, Next Day Funding from Elavon is a great cash flow management solution that connects you to the cash you need when you need it most.

Fast Track Funding

With Fast Track Funding, we put your funds into a specialized fast lane that speeds up the normal funding process. You can submit a payment batch each day before 6am ET with transactions totaling up to $100,000. This means that you can submit your batch late Monday night after your business closes, and your funds will be deposited into your account by 5pm local time on Tuesday. No second-guessing the exact hour of arrival or wondering if the funds will arrive before a withdrawal hits your account.

True Daily Funding

True Daily Funding is a cash flow management solution that allows you to unlock the potential of same-day cash flow. Powered by Real-Time Payments (RTP) network, True Daily

Funding enables your business to be funded quickly with up to $1,000,000, with minimal waiting or delay. Perfect for businesses that can’t wait until the next day, you get funded within hours of a batch submission, seven days a week, including weekends and holidays.

On Demand Funding

On Demand Funding is a next generation cash flow management tool that allows you to transfer money from transactions in your open batch directly to a linked debit card in as little as 30 minutes. You can immediately access the funds to make purchases or pay bills with up to $50,000 per day in transfers, even on weekends and holidays. It is not a loan with ongoing interest, just a one-time fee of 1.5% of the amount of money you settle through On Demand Funding.

Standard ACH

Available on all business accounts, Automatic Clearing House (ACH) is the standard speed of funding. ACH solutions allow you to improve cash flow forecasting, increase accuracy through electronic payments and access funds with greater speed and visibility. ACH funds are made available within one to two business days of a batch being submitted.

On top of ensuring you have the solutions and processes in place to get funding when you need it the most, ensure your business is always planning ahead. Forecast your future expenses and document any peak or slow seasons for your unique business and create a calendar using these key inputs that will guide your business decisions throughout the year.

Don’t let funding and cash flow issues hold your business back. Talk with Elavon about a cash flow management solution to help your small business get the money it needs.