Prepare For Lower Cash Flow While Oil Prices Are Low
A few things seem certain for the upcoming year for anyone in the oil and gas industry; make sure you really know your customers, and pay close attention to your cash flow. With oil prices hovering around $46 dollars a barrel right now most anyone in the industry will tell you this will be a challenging year. I recently read projections which say oil prices should rebound to around $63 dollars a barrel by mid summer, then another publication speculating that we may not see a rebound until 2017. So…what’s going to happen? Without being able to consult an oracle or read a crystal ball, I really don’t think anyone knows for sure.
That said, what’s a business owner to do? A few things come to mind:
Know Thy Customer
If in the best of times you have slow paying customers you can expect those payments to slow even more in this environment. So, make sure you know you are doing business with solid, reputable companies and watch your receivables very closely. Many business owners rely on factoring companies to perform credit checks on their potential customers as well as helping them make sure their invoices are being paid in a timely fashion.
Manage Your Cash Flow
Make sure you know what you’re being paid for and when; as well as making sure you are bidding on work appropriately and managing expenses. If you have not looked into finding a good factoring partner now may be a good time. A good factoring company can provide your business with cash from your invoices that you would normally be waiting to get paid on. By factoring your invoices you can ensure you have a steady stream of cash coming into your business.
Keep Your Vendors Paid and Happy
Times may be tough for everyone in the oil and gas industry for the foreseeable future. So, be sure you are keeping up with when your vendors need to be paid. They are waiting on money to come in just like you are. As you know, good strong relationships are often forged during challenging times. By managing your cash flow through factoring invoices you may find it easier to keep up with those vendors.
- Pay Your Taxes
Always…and on time. We know this seems simple enough, however it still needs to be said.
Security Business Capital Can Help With Your Cash Flow Issues
That old saying “what goes up, must come down” is proven true time and time again throughout history. So, while you are waiting for what has come down to go back up; you may find by using best business practices and really managing your cash flow your business will weather the storm just fine. If your business is in need of immediate cash flow, oilfield invoice factoring may be the right option. Get in touch with us today to find out more information about our cash flow solutions.