Optimizing Cash Flow When Inventory & Receivables Tie It Up

Written by the experts at American Express

When inventory management ties up your cash and adds warehousing costs, credit moves can free up cash flow. Here are some ways every entrepreneur can optimize cash flow:


Your business has higher demands at specific times of the year. To be ready to sell means placing orders ahead of time to be prepared for the rush. Meanwhile, you’re incurring storage costs until you can sell what you’re sitting on. So, what can you do? Use American Express payment solutions to take advantage of “just-in-time” (JIT) delivery, also known as “getting the right products at the right time”. JIT saves money because companies are able to accept deliveries when the products are needed and spend less on storage costs. You can apply JIT principles by reviewing your purchases and the timing of your sales. On the purchasing side, American Express accounts include reports across categories and vendors, so you can use that information to negotiate volume discounts and get seasonal items delivered in smaller amounts more frequently to match your expected pace of sales. While making smaller orders can seem like more work due to processing individual bills, setting up automatic supplier payments and consolidating with a business card can help increase efficiency and keep track of spending.


Although your cash may be locked up in your stock, there are a couple of ways to unlock it before you can actually sell it. With American Express, you can take advantage of up to 55 days interest-free1 when purchasing stock. Plus, you can reinvest in your business with rewards earned on all your eligible Card purchases2, which you can redeem for statement credits, merchandise and more.


Sometimes it can be worth it to carry additional inventory. For example, acquiring deep-discounted stock during off-periods, or taking advantage of a supplier’s special pricing. American Express has your back with that too — with no Pre-set Spending Limit3, you can get what your business needs as soon as you need it.

Put more back into business with a payment solution built to back business – speak to our dedicated RevolutionHER American Express Representative today! 

Charles Breleur  ☎ 1-866-478-5732 ✉  charles.breleur@aexp.com

This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice. 1. As a charge Card, the balance must always be paid in full each month in which no interest charges will apply. The interest-free grace period is 28, 29, 30 or 31 days from the closing date of the current statement to the closing date of the next statement depending on the number of days in the calendar month in which the closing date occurs. The number of interest-free days varies based on a variety of factors, including when charges are posted to your account, whether your account is in good standing, and the closing date of your statement. 2. Rewards not available on all Cards. Rewards vary by Card product. Conditions apply. 3. Having no Pre-set Spending Limit on purchases does not mean unlimited spending. Your purchases are approved based on a variety of factors, including your credit history, account history, and personal resources. Proof of resources and security may be required. TM, ®: Used by Amex Bank of Canada under license from American Express.