Is your business having cash flow problems? Here’s how technology is the...

Is your business having cash flow problems? Here’s how technology is the answer

0
SHARE

Cash flow is one of the most important things to think about when starting a business, and the worry never really goes away as your company expands. In some cases, one customer missing a payment can cause a ripple effect big enough to bring down a fully-functional business.

Short on cash and low on time, small businesses especially are falling foul of this problem, with many finding usually manageable cash flow issues causing big headaches for business owners.

Over a half of businesses that go bust are still profitable, but cite cash flow as their main reason for shutting up shop. In an economy where big business is omnipresent in society, how can small businesses and new business owners get ahead of the curve?

As technology advances and screen time becomes more popular than interpersonal face time, businesses using older cash management techniques are scrambling to meet demands and handle cash flow issues. There are a number of ways you can improve your business and manage your finances – and updating to the latest technology is the answer.

What you need to know about cash flow

One proactive tip for reducing cash flow problems is getting your invoices in as early as possible, leaving your customers with enough notice for payment. Incorrect or late invoicing is a big reason for payment issues in business, which then leads to cash flow difficulties for the party waiting for payment. By improving your invoicing and administration practices you can avoid these issues and streamline your business.

Another way to get around cash flow issues is through the use of invoice financing. Invoice financing is the process of borrowing money based on how much customers owe, helping businesses to keep on top of their cash flow, pay employees and reinvest in operations.

However, in the past this practice has been pricey and doesn’t always fix the problem right away as disputed invoices still occur.

Companies are now stepping up to offer accounting software and services on an online platform that works in real time to keep small businesses moving. The accounting software they use allows businesses the freedom to check on their finances and helps to avoid human errors in the bookkeeping and invoicing stages of business. Many businesses still use Excel spreadsheets to prepare their accounts, which can be quite time-consuming.

Which cash flow tech solutions are available?

Simply changing your account routine and using an online system like Cashflow Manager to complete your statements, check payments and raise invoices will save you time and increase the level of your company’s cash flow. There is also a handy app you can get for your smartphone, making it even easier to invoice as quickly as possible.

In Australia financial technology companies are starting to address these challenges, and the government are making plans to take up a paperless, e-invoicing system on a wider scale. Companies like Waddle currently offer an updated version of invoice financing for the modern business owner. Features include automated funding that instantly updates your line of credit and live bookkeeping that keeps an account of your transactions.

Xero is another online accounting service that is trying to help business owners manage their cash flow by chasing up late payments. Xero’s invoice reminders send an automatic message once customers miss their due dates. These friendly reminders save you time help you to avoid any awkward non-payment follow up emails. Xero also has many features to help you to accurately project your cash flow and can alert you to any problems before they become too big to handle.

Aside from signing up to an online accounting service, one of the easiest things you can do today to improve your cash flow issues is download your bank’s mobile app. Most banks offer an app that allows you to pay bills, see your ingoings and outgoings and check your balance on the go. This freedom means you can transfer payments and deal with your banking without having to queue up at the bank.

It would also be prudent to create a backup of any files and now it’s easier than ever to create a cloud backup for your business. Rather than saving all your important documents to a physical hard drive which can be damaged or lost, use cloud technology to get the best out of your accounting. Using a cloud system like Gmail, Google Docs and Dropbox allows you to share files with others just by clicking your mouse, and control what kind of access they have to your files.

Utilising the right technology will improve the practices in your business, thus improving the way your business runs. New developments are ridding us of age-old accounting problems as well as saving businesses time and money, making staying on top of the latest technology crucial to becoming successful in your field.

Leigh Dunsford is the Co-founder of Waddle, an Australian based financial technology (FinTech) company that leverages deep analytics from accounting & banking data to provide automated revolving credit lines to business. Waddle was founded in 2014 and integrates with Xero, MYOB and QuickBooks Online.

Leigh Dunsford

Get unlimited access to our FREE business tools…

Need to raise capital? Want to become a more persuasive presenter? Want to master social media? Is it time to overhaul your website? Unlock the library to get free access to free cheat sheets and business tools. Click here for free business tools.