STABILIZING YOUR BUSINESS CYCLES WITH GOVERNMENT SALES

As a business owner or manager, you should be ever vigilant of the state of your company's cash flow and your customer's ability to pay.  Some of the best accountants and business forecasters have great difficulty in maintaining accuracy in this function. Inaccuracies in cash flow projection can result in a cash shortfall over a period of time. This can have devastating and costly implications.  If you expected to have adequate cash flow yet when the time came, you did not have enough capital to cover expenditures, you would either have to dip into cash reserves, delay payment to creditors, or tap into a commercial line of credit. Typically, the cost associated with covering unforeseen short term cash needs is not figured into a company's operational budget. Therefore the resulting effect can be significant margin erosion.

A sales manager's dream is an account that pays good margin dollars for the product or service the company sells, and pays the invoices on time. This allows the manager to concentrate on his main function; to sell the service or product, and not chase income already accrued.

Government business allows for stabilization of your general business cycle. Because payments from the government are guaranteed by the Federal Prompt Payment Act, you have the option to extend the cycle of your commercial accounts, or to invest the monies derived from government contracts towards future commercial or government sector growth.  Additionally, as the needs of the government are global in nature, there is most likely much less seasonality in their purchase trends, then what you experience with your commercial business.  As a result, manufacturing cycles will be shorter, and sales of products that may have tended to be seasonal in nature, will occur in a more steady fashion.