Cash flow tips to make your business thrive.
Make it easier to pay and get paid.
The challenge
Even though solutions such as ACH, invoice automation, virtual credit cards and eChecks are on the rise, a recent study shows that nearly $9 trillion of commercial payments are still made with paper checks in the United States.
You might say, if it isn't broke, don't fix it. But the problem is that paper wreaks absolute havoc on cash flow.
Paper checks take time to print, sign, stuff into envelopes, mail, and clear.
Paper invoices consume time and resources with similar, labor-intensive processes. It takes time to get paper payments — both AR and AP — from point A to point B, and even longer before they impact your finances. Meanwhile, your cash flow is not improving.
The solution
Go digital. Here’s why:
1. Online payments will reflect in your balance immediately. There’s no guessing about when a check to a vendor will hit your account.
2. Invoices get to customers faster. Since they’re digital, they can reach the customer immediately — no waiting for printing and mailing.
3. Customers can pay online via EFT or ACH transfers or credit card, forgoing the time-intensive processes of paper-based review and checks. And you won’t have to make a bank run or wait 30+ days for payment. With the click of a button, your customer can authorize their payment, landing it in your account in short order.
Unite accounting solutions and apps.
The challenge
Activities that affect your cash flow occur in different systems that often aren’t communicating with each other, giving you only a partial idea of what's happening within your business.
The solution
Integrate your accounting solutions with your accounting software. These programs serve an important purpose, but if they don't have all the information, they can't accurately present your cash flow. Plus, you don't have to bother with manually inputting information from one system into another.
Capture a real-time snapshot of your finances.
The challenge
Outdated tools, such as paper checks and invoices, impede cash flow clarity. That leaves your cash flow in limbo.
The solution
Whittle down the moving pieces — and the time they take. When you adopt digital payments and processes, modern accounting solutions capture activities as they happen and reflect the real-time status of your cash flow. That amount in your bank account? It'll appear much more resolute as it reflects ACH transfers and customer payments without a 45-day wait for end-of-month reports.
Cultivate stability.
The challenge
You’re waiting for customers to pay and considering the various reasons they haven't. Did they get the invoice? Did their check get lost in the mail?
Managing cash flow is crucial for the sustainability of any business and when waiting for customers to pay, there's often a sense of anticipation mixed with concern. Meanwhile, your cash flow is dwindling no matter the reason that your customers' money isn't in your account.
The solution
Welcome your new solution — recurring payments.
Automatic payments are commonplace these days. Take a look at your personal spending and you’ll probably find debits each month covering everything from streaming services to utilities.
Customers are used to automatic payments. Talk to them about it and you may be surprised at how many welcome the idea.
Use the automation advantage in AR solutions. Set up invoices to send automatically and your customers can authorize automatic payments. That way, on the first of the month (or any day you select), your customers’ payments land in your banking account.
Make it easier to access.
The challenge
You want to keep a continual eye on your cash flow, but it’s hard to check because it’s tied to a specific program, computer or user. In short, it's not always easy to gain access when you need it.
The solution
Adopt cloud-based accounting technology solutions, enabling you to access your information securely via your laptop, smartphone, tablet or any other internet-enabled device. These platforms offer flexibility and convenience, allowing you to monitor cash flow on-the-go and make timely decisions to optimize financial performance.
Use the past to prepare for the future.
The challenge
It’s hard to anticipate the ebb and flow of cash flow over time.
The solution
Don’t neglect your historical financial performance. When you move to digital processes, this type of information is much easier to identify. Perhaps you have a particular segment of the year that is consistently busier than the rest of the year. Or maybe you have contract renewals and negotiations that land close to the same time that will impact cash flow. Use past data to get a feel for any recurring cash flow behavior and let it guide your long-term planning.
By implementing these cash flow strategies, you can streamline operations, enhance financial visibility and position yourself for sustained growth and resilience in today's dynamic business environment.
