Klear FAQ: Working Capital, Invoice Financing and Cash Flow

Klear is a Capital Intelligence platform for growing industrial suppliers, including manufacturers, aerospace and defense suppliers, and government contractors. It shows where cash is tied up across your orders, invoices and supplier payments, then unlocks it two ways: by advancing up to 90% of approved invoices, and by paying your suppliers upfront on approved purchase orders through Procurement-as-a-Service (PaaS).

The result is that you get paid now instead of waiting 30, 60 or 90 days, and you can take on larger orders without tying up operating cash.

Learn more about the Capital Intelligence platform and working capital solutions.

No. Klear is not a lender. It doesn't issue debt and doesn't require a personal guarantee. Klear purchases approved invoices from you, or pays your suppliers on your behalf for a specific purchase order. You're getting paid sooner for revenue you've already earned.

Think of Klear as a fintech platform, not a bank. Because Klear buys the invoice rather than lending against it, your access to capital is based on the strength of your customers, not only your balance sheet.

Traditional factoring companies buy your invoices, notify your customers and take over collections, often under long contracts with volume minimums. Klear purchases approved invoices too, but it doesn't contact your customers, doesn't take over collections and doesn't require a personal guarantee.

Your customer relationships stay yours, and funding comes with software that shows where cash is tied up across every order.

Read more in Invoice Factoring Explained: How It Works, Costs, Risks and Better Alternatives.

Klear has operated since 2021 and works with suppliers across aerospace, defense, industrial manufacturing and government contracting. Credit insurance on eligible receivables is provided by Allianz Trade.

See customer stories or learn more about Klear.

Klear's financing capital comes from institutional capital providers, not from Klear's operating balance sheet. Allianz Trade credit insurance on eligible receivables helps manage the risk that a customer doesn't pay. The structure is built to scale as your order volume grows.

Klear doesn't contact your customers or notify them that you use Klear. Klear sets up a dedicated account in your company's name, and your customer pays that account instead of your usual one. From your customer's side, the only change is the account number on the invoice.

No. You keep communicating with your customers about invoices and payments, the same as today. If a customer defaults on a Klear-funded invoice, the Allianz Trade credit insurance claim process applies to eligible receivables, so Klear isn't chasing your customer.

Often, yes. It depends on the terms of your existing facility. Some asset-based lending (ABL) facilities include a blanket lien on receivables, which has to be addressed before Klear can purchase invoices. Many suppliers use Klear alongside existing credit, especially when the facility doesn't cover all receivables or doesn't fund purchase orders.

Klear reviews your existing agreements before you start to make sure there's no conflict.

Often, yes. Eligibility depends on whether Allianz Trade can insure the foreign buyer, and many large international companies qualify. Submit the buyer's name through the platform to check availability and limits.

Foreign currency and payment routing are handled case by case. For paying overseas suppliers, see KlearFX.

There is no hard revenue minimum. Klear looks for three things: creditworthy customers (companies or government entities), invoices for work or goods already delivered and accepted, and invoices no more than 30 days past due when submitted. Early-stage companies with strong customers can qualify.

For Procurement-as-a-Service, Klear also needs an existing purchase order and a track record with that buyer.

Onboarding can take as little as 2 to 3 business days when your customers are already known to Klear, such as large defense primes, retailers or Fortune 500 companies. A new customer may need an Allianz Trade credit review, which takes 1 to 3 days. After onboarding, approved invoices are typically funded within 24 hours.

Klear needs evidence that your customer accepted the goods or work and that the invoice isn't disputed. That can be an email confirmation, a signed delivery receipt, a payment approval in a government portal, or a purchase order that clearly matches the invoice. The proof doesn't need to show a payment date, and the bar is lower with customers you've invoiced before.

Some accounting software connections are available on the platform today, with more in progress. You can also upload invoices manually or by CSV. Most suppliers keep invoicing in QuickBooks or NetSuite and submit the invoices they want funded to Klear, so you don't have to move your accounting.

Klear advances up to 90% of an approved invoice upfront. The remaining 10% is held as a reserve until your customer pays in full, then released to you minus Klear's fee. The reserve covers small disputes, short payments and credits, and it is standard practice in receivables financing.

If a customer pays late, Klear's fee keeps accruing daily until the invoice clears. The cost goes up, but there is no sudden default. For non-payment, eligible receivables are covered by Allianz Trade credit insurance. Allianz underwrites your customers and, in a covered default, handles the claim and collections process.

Procurement-as-a-Service (PaaS) is Klear's purchase order financing. You bring Klear a purchase order from a creditworthy customer. Klear buys the inputs you need, such as raw materials and components, and pays your supplier directly. You fulfill the order, ship it and invoice your customer.

That invoice then typically becomes an invoice Klear funds, so you're paid right away instead of waiting on your customer's terms. Klear buys the goods on your behalf. It is not lending you money.

PaaS funds operating inputs tied to a specific order: raw materials, components, inventory and supplies. It doesn't fund capital equipment such as machinery, vehicles or other long-lived assets. Those fall under equipment financing, a separate product category Klear can help point you toward.

Klear pricing has two parts. There's an annual platform subscription, $10,000 a year for Grow or $36,000 a year for Pro. There's also a transaction fee of about 1% to 1.5% of invoice value per month while an invoice is outstanding. See plans and pricing.

Either. Grow is $10,000 a year or $1,000 a month. Pro is $36,000 a year or $3,333 a month. Paying annually upfront earns a discount, and both plans lock in your pricing for 3 years.

The Grow plan typically pays for itself at around $1 million a year in funded invoices. Pro breaks even at around $3 million a year. Below those levels, the platform still gives you cash flow visibility and forecasting, and the full financial payoff grows with your volume.

Working capital is the money a business has available to run day-to-day operations. It equals current assets (cash, accounts receivable and inventory) minus current liabilities (accounts payable, accrued expenses and short-term obligations). Positive working capital means you can cover near-term bills. Negative working capital means the bills coming due exceed the cash and assets available to pay them.

For manufacturers and defense suppliers, the bigger question is where working capital is sitting. Cash gets locked in raw materials, work in process and unpaid invoices for months. Read What Is Working Capital? The Complete Guide.

Working capital is calculated by subtracting current liabilities from current assets. If a supplier has $8 million in current assets and $5 million in current liabilities, its working capital is $3 million. Dividing current assets by current liabilities gives the working capital ratio, which is 1.6 in this example.

A healthy ratio shows the business can pay its bills, but not how quickly receivables and inventory turn back into cash. A supplier can show strong working capital and still be short of cash if most of it sits in Net 90 receivables.

The working capital cycle is the time it takes cash to travel from paying suppliers, through production and delivery, to collecting payment from your customer. Every day in that loop is a day the cash can't fund the next order. Shortening any stage, whether inventory, collections or supplier payments, frees up cash.

Industrial suppliers often pay for materials months before they ship, then wait 30 to 90 days or more to be paid. See Order-to-Cash Mapping.

Working capital financing is any funding that covers the gap between paying for production and getting paid by customers. Common options include bank lines of credit, asset-based facilities, invoice financing and purchase order financing. The best fit depends on your order sizes, the quality of your customers and how fast you're growing.

Bank credit is sized to your balance sheet. Invoice-based and order-based funding is sized to your sales, so it grows as orders grow. Klear purchases approved invoices and funds supplier payments on approved purchase orders. Explore Klear working capital solutions.

Growth uses cash before it generates cash. Each new order means paying for materials and labor upfront, while revenue arrives weeks or months later. The faster a manufacturer grows, the wider that gap gets, even with healthy margins. That's why suppliers with full order books can still struggle to fund the next order.

Cutting costs rarely fixes it. Matching capital to orders does. Read Why Cash Flow in Manufacturing Companies Breaks or see how Cakeboxx handled it.

Manufacturers improve cash flow by shortening the time cash is tied up across the order cycle. Invoice on the day of shipment, clear acceptance paperwork quickly, hold less slow-moving inventory and time supplier payments to match customer payments. Then fund the gap that remains with financing tied to your orders and invoices.

Start by measuring your DSO, DIO and cash conversion cycle, so you know which stage costs the most days. A 10-day improvement in collections usually frees more cash than a round of cost cuts.

Non-dilutive funding is capital that doesn't require giving up ownership in your business. Examples include customer revenue, grants, government contract payments and funding based on receivables or purchase orders. Owners keep full equity and control while still financing production and growth.

For manufacturers and government contractors, receivables and purchase orders are often the largest non-dilutive source available. Selling approved invoices or funding supplier payments on specific orders through Klear keeps ownership where it is.

Order-to-cash covers every step from receiving a customer order through fulfillment, invoicing and collecting payment. A delay at any handoff, such as late invoicing, missing paperwork or slow customer acceptance, extends the time cash is tied up. Mapping O2C next to your supplier payment schedule shows exactly where working capital gets trapped.

Klear puts orders, invoices and payments on one timeline with order management, so finance and operations see the same cash picture.

Capital velocity is how many times a year the same dollars cycle from materials to delivered product to collected cash, then back into the next order. A company with a 30-day cash conversion cycle can turn its capital about 12 times a year. One with a 120-day cycle turns it about three times.

Raising capital velocity grows revenue without raising more capital. Read Burns and Turns to learn more.

Working capital visibility means knowing, at any moment, where your cash is tied up and when it will come back. That includes inventory on hand, invoices awaiting acceptance, receivables by due date and supplier payments coming due. Without it, teams find out about a cash gap when it arrives.

Most suppliers piece this together from an ERP, a bank portal and spreadsheets. The Capital Intelligence platform brings it into one view.

The cash conversion cycle (CCC) is the number of days between paying for inputs and collecting cash from customers. It equals days inventory outstanding plus days sales outstanding minus days payable outstanding. A supplier with 75 days of inventory, 70 days of receivables and 40 days of payables has a 105-day cycle.

A shorter cycle means cash comes back sooner and can fund the next order. Turning approved invoices into cash shortens DSO, which cuts the cycle without changing your customer's terms.

Days sales outstanding is the average number of days it takes to collect payment after a sale. To calculate it, divide accounts receivable by revenue for the period, then multiply by the number of days in the period. A supplier with $3 million in receivables and $4.5 million in quarterly revenue has a DSO of 60 days.

Use credit sales if some customers pay upfront. Suppliers to large primes and OEMs on Net 60 or Net 90 terms often have a high DSO even when every customer pays on time. Read DAP Incoterms, Net 90 EOM and the Cash Flow Trap.

A good DSO is close to your standard payment terms. If you sell on Net 45 and your DSO is 50, customers are paying roughly on time. If it's 75, invoices are slipping because of disputes, late invoicing or slow acceptance. Compare DSO with your own terms rather than a generic industry number.

When DSO matches your terms and is still too long for your cash needs, the terms themselves are the constraint. That's a funding problem, not a collections problem.

Days inventory outstanding measures how long inventory sits before it is sold, including raw materials, work in process and finished goods. To calculate it, divide average inventory by cost of goods sold, then multiply by days in the period. A manufacturer with $2 million in average inventory and $8 million in annual COGS has a DIO of about 91 days.

Long-lead parts, low-volume runs and qualification requirements push DIO higher in aerospace and defense. Lowering DIO frees cash, but cutting safety stock too far puts on-time delivery at risk.

Days payable outstanding measures how long a company takes to pay its suppliers. To calculate it, divide average accounts payable by cost of goods sold, then multiply by days in the period. A higher DPO keeps cash in the business longer, which is why large buyers push for long payment terms.

For smaller suppliers, stretching vendors can damage key relationships or forfeit early payment discounts. Klear's Procurement-as-a-Service pays suppliers upfront on approved purchase orders, so vendors get paid on time without draining your cash.

The accounts receivable turnover ratio measures how many times a year a business collects its average receivables. To calculate it, divide net credit sales by average accounts receivable. A supplier with $12 million in annual credit sales and $2 million in average receivables has a turnover of 6, so it collects its receivables about six times a year.

AR turnover and DSO are two views of the same thing. Divide 365 by the turnover ratio to get DSO, about 61 days in this example. A rising ratio means cash is coming back faster.

Yes. Accounts receivable is a current asset on the balance sheet, because it's money customers owe you that you expect to collect within a year. It counts toward working capital alongside cash and inventory, and it's one of the few assets a business can turn into cash before it is due.

Until customers pay, though, receivables can't cover payroll or a supplier invoice. Klear purchases approved invoices from creditworthy customers and advances up to 90% of their value. See working capital solutions.

Net terms set how many days a customer has to pay an invoice in full. Net 30 means payment is due 30 days after the invoice date or another trigger set in the contract. EOM versions such as Net 90 EOM start counting at the end of the month, which can add up to 30 more days.

Large aerospace, defense and industrial buyers commonly ask for Net 60 to Net 120. Every extra 30 days of terms ties up roughly another month of revenue in receivables.

2/10 Net 30 is an early payment discount. The customer can take 2% off the invoice by paying within 10 days. Otherwise, the full amount is due in 30 days. On a $100,000 invoice, the customer saves $2,000 for paying 20 days early.

For the supplier, that's $2,000 to get cash 20 days sooner, a high price when it's repeated on every invoice. Before offering one, compare it in dollars with other ways to bring cash in sooner.

Dynamic discounting is a buyer-run program that pays an approved invoice early in exchange for a discount that shrinks the closer payment gets to the due date. The buyer funds it with its own cash. Suppliers only get it from customers who offer a program, and only when the buyer has cash set aside.

Klear works across any eligible customer, whether or not they run a program. For corporate buyers, Klear supports critical suppliers without tying up the buyer's own capital. See Klear for corporate buyers.

Often the real choice is long terms or no account, so the better question is how you'll fund the gap. Model the cash needed to carry the order through production plus 90 days of receivables, and negotiate milestone billing, deposits or shorter terms on materials-heavy orders where you can.

If the customer is creditworthy, its approved invoices can be turned into cash, so long terms don't hold up your next order.

Trade credit is the short-term credit a supplier extends when it delivers goods now and accepts payment later on agreed terms. It is one of the largest sources of funding for buyers. For the supplier, every invoice on terms is cash that's temporarily out of the business.

Suppliers manage that exposure two ways: trade credit insurance covers the risk that a customer doesn't pay, and turning invoices into cash early covers the wait.

Trade payables are the amounts a business owes its suppliers for goods and services bought on credit, such as raw materials and components. They're a current liability on the balance sheet and the mirror image of a supplier's receivables. Trade payables reduce working capital, but they also keep cash in the business longer.

For manufacturers, trade payables are often the largest short-term obligation, and timing them against customer payments is one of the most direct ways to manage cash flow.