That's why it's important to keep track of your cash flow.

Cash flow is the heart of the business

Keeping track of cash flow – that is, the money flowing in and out of the company over a period – is important for the company to grow and to avoid sudden liquidity problems. It is also a good tool for knowing when is the right time to purchase inventory. As an e-commerce business or wholesaler, you don't want to buy too much or too little inventory in order to get the best possible results. Timing is important - by analyzing your cash flow, it is easier to know when it is time to place an order before, for example, Black Friday or Christmas. 

‍Cash flow can be a problem even if the business is doing well

It is easy to believe that cash flow is not a problem if the business is doing well. However, the reality is not always that simple. If the business grows with double-digit percentages every year, it requires larger and larger investments in inventory and other things. The cash cannot keep up. A credit line from the bank can be a way to handle unforeseen costs, but often it is not enough. 

Ensure that cash flow does not become an obstacle to growth

In 2020, it was reported that imports and exports worth SEK 1,500 billion were not carried out because there was a lack of financing in some form. Anyone who owns and runs an e-commerce business knows how sensitive it can be to not have a best-selling product in stock. Therefore, it is good to be prepared if the need arises. 

One alternative is a credit line from the bank. Keep in mind that it comes with a fixed fee on the entire credit limit each year, regardless of whether it is used or not, so it is wise that the credit limit is not too high. The fee is normally 0.5-1.5% per year. In addition, there is a withdrawal interest rate on the amount used. 

If the company is a fast-growing e-commerce business, wholesaler or D2C, another alternative (or complement) to the credit line is supplier financing with Waylog. It works by the company sending the supplier invoices that they want to pay later to Waylog, then Waylog pays the supplier and the company pays Waylog up to 120 days later. In this way, you can get the goods home and sell them before they have to be paid for.

Having access to a limit and Waylog's platform is free of charge, so if the need arises, you are prepared without the company incurring fixed costs. The company only pays a fixed monthly fee on the amount used. Is it interesting for your business? Get in touch and we will tell you more.