Unlock the power of invoice financing for seasonal demand peaks

by | Oct 18, 2024 | Inventory Management, Order Management, Suppliers

Seasonal demand spikes can bring tremendous growth opportunities—but they can also bring cash flow challenges. As operating costs and inventory needs increase, delayed customer payments can stretch your liquidity. That’s why SPS offers a seamless solution to unlock the cash tied up in unpaid invoices, so you can respond to demand head-on without halting your operations.

How invoice financing works

Waiting for customer payments creates cash flow obstacles. Invoice financing offers a practical solution by unlocking the value of outstanding invoices, providing businesses with immediate access to funds. Here’s how it works:

  • Unlocks cash tied up in unpaid invoices within 24-48 hours.
  • Provides flexibility to cover day-to-day expenses or invest in new growth opportunities.
  • Supports consistent cash flow during peak seasons.

Managing cash flow during seasonal peaks

High-demand periods can test a company’s financial resilience. Businesses may struggle to balance increased inventory costs, navigate higher operational expenses and manage the need for extra staffing—all while waiting for customer payments. Strain on cash flow can limit a company’s ability to capitalize on peak season opportunities, but with invoice financing, businesses can quickly access cash that they’d otherwise be waiting on for weeks or months.

Are these common challenges familiar?

Preparing for increased inventory needs: Inventory costs often soar during high-demand periods. Invoice financing ensures that you have the cash flow needed to purchase and stock up on products well in advance.

Covering operational and staffing expenses: Additional staffing and extended hours can drive up operational costs. By unlocking cash that’s tied up in invoices, businesses can manage these expenses without financial strain.

Here’s how invoice financing makes an impact:

  • Cover rising costs immediately with quick access to cash.
  • Flexible terms that align with your specific business needs.
  • Maintain liquidity without waiting on delayed customer payments.

For more insights into handling cash flow challenges, check out our guide on common cash flow challenges for businesses.

Implementing invoice financing for seasonal success

Invoice financing is a simple way to access working capital. Businesses can integrate invoice financing in just a few steps, unlocking cash flow without disrupting daily operations.

Preparation tips:

  • Forecast seasonal demand to anticipate cash flow needs accurately.
  • Evaluate financing terms to ensure they align with your business cycle.
  • Leverage expert support from SPS to streamline the financing process.

Learn more about how capital financial products can improve cash flow in our guide to capital financial products.

As you prepare for peak season, here are some real-world challenges solved by SPS Commerce Invoice Financing, powered by Kanmon.

Tackling holiday order surges

As a supplier traditionally faces surges in dropship orders each holiday season, delayed payments leave them short on working capital, making it difficult to restock inventory and scale up staffing quickly.

After using SPS Commerce Invoice Financing, they accessed funds tied up in unpaid invoices within 48 hours, allowing them to proactively manage stock levels and hire a seasonal workforce.

Preparing for seasonal stocking

Retail trading partners often ask suppliers to stock up ahead of high-demand periods, ensuring retailers are prepared. But the gap between production costs and payment receipt can severely impact cash flow.

One mid-sized manufacturing company regularly experiences a surge in orders every summer. With long payment terms from customers, they needed immediate capital to purchase machinery and materials. Invoice financing from SPS Commerce enabled them to unlock cash quickly, allowing them to confidently scale production and meet customer demand on time.

With the holidays on the horizon, now is the perfect time to explore SPS Commerce Invoice Financing to ensure your business is ready for the seasonal rush ahead. Get Started with SPS Invoice Financing Today.

SPS Commerce Blog Team
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