General Technology for Improved Cash-Flow Management
Maintaining a healthy flow of cash into and out of a business is a perpetual problem for small business owners. There are any number of surveys which illustrate the extent of the problem. For example, a survey of more than 600 SME owners found that 20 percent said their business was owed more than £25,000 in late payments, while 8 percent said more than £100,000 was overdue. Estimates place the total value of payments overdue in the UK somewhere in the region of £212billion!
Late payments lead to reduced profitability, knock-on late payments to business suppliers and reduced business growth, so it’s clear that cash-flow is something small business owners need to keep a real eye on. The good news is that keeping your cash-flow under control has never been easier than it is today thanks to an increasing array of software platforms. Here are some of the ways modern technology can help.
Pay invoices on the move
One of the small business owners’ biggest gripes used to be the hours spent on weekends issuing invoices and making payments, but now these jobs can be done on the move. Simply downloading your bank’s mobile application if available will also allow you to check whether payments have been made and pay bills while you’re out and about.
The rise of e-Invoicing
Electronic invoicing, or e-Invoicing, is the exchange of an invoice between a supplier and a buyer in electronic form, rather than the traditional paper-based method.
Paper-based invoicing is labour intensive and prone to human error, which can lead to increased costs and delays in payment. E-Invoicing makes the process more transparent and reduces the time for any corrections to be made. It is also clear when an invoice has been received. If there are any queries on the invoice, these can be resolved quickly to reduce the time it takes to get paid.
Accepting payments as you go
Small businesses that want to accept payments on the move can now do so using a credit card reader that connects simply to a smart device. This allows merchants to accept payments on the hop rather than issuing an invoice and waiting for the payment to be made. Many platforms now have app versions, which allows small businesses to accept and make payments without having to rely on their cards.
It’s all in the cloud
The advent of cloud computing has made cash-flow technology much more accessible to small businesses. Instead of paying for the latest software and hardware, small businesses can simply pay for the tools they need on a monthly basis. Instead of being stuck to their desks, this allows them to perform time consuming tasks like sending out invoices on the move. They can also process invoices more quickly and chase overdue payments as soon as the contracted terms are up.
This anytime visibility gives business owners a better understanding of how much cash is in the business at any one time, and more generally, of how their business is performing.
How can we help?
If you feel like your cash-flow situation is spiralling out of control, our small business accounting and bookkeeping service will help manage your receipts, bills, invoices and bank reconciliations on your behalf, leaving you to focus on growing your business. To request a quote, please get in touch with our team today.
To find out how KPMG Small Business Accounting could help free up your time so you can concentrate on business success, request a callback for a quote today.
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