I have an experiment I’d like you to try. No wait…I TRIPLE DOG DARE you to try. Go to your gatekeeper or other top employee on payday and instead of giving them a paycheck, give them an invoice for monies due. Outline their pay stub on the invoice and give them 30 day terms. Then duck.

They won’t accept that from you, but you accept that from your customers. Why? That’s how business is done. In the meantime you have to make payroll, pay your vendors and continue working. That can be pretty tough to do with nothing but a bunch of IOU’s from your customers.

There is a 4,000 year old industry that specializes in giving you money for those invoices. It’s called factoring and it is a billion dollar industry. Each year millions of companies sell their invoices to a factor and enjoy the constant flow of cash they have coming in each time they invoice their clients. Do you recognize these names…Home Depot and Coca-Cola? Both these conglomerates factor their invoices. Take a look at the fine print in your Home Depot bill. You will notice you are actually paying CitiBank. If the big guys do it, why shouldn’t you?

How does it work?

Let’s say you bill client XYZ for $10,000. You send both them and your factor the invoice. Your factor gives you $8,000 in 24 hours. In a perfect world, XYZ will pay in 30 days. So let’s assume that’s the case here. The factor will receive the payment for $10,000, recover the $8,000 already advanced, take out their fees, let’s say $300 and you get the remaining $1,700. So over the life of the invoice, you’ve received $9,700 and you paid $300 to get your money faster. Not a bad deal…especially for a growing company like yours.

Finally there is a way to get peace of mind and grow your business.