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How to automate your cash flow (and get paid faster).

Cash flow is the foundation of your business. You need your customers to pay you on time, so that you’re able to pay your bills. Unfortunately, from invoicing the customer to accepting their payment, there are a number of steps that influence – and hinder – cash flow. Chief among them are bulky, out-dated processes and documentation that might be holding your team back. If you use paper checks or handle approvals manually, you could be due for some upgrades to make your payments process run more smoothly, which would improve cash flow and help you get paid faster.

Accounts Receivable, or getting paid by others.

Once the order is complete, or maybe even before, you begin the process of invoicing the customer for the amount they owe. If their only options for making payment are cash or check, they’ll likely take their time. As their check makes its way to you through the mail, you’re left waiting for your payment and hoping that it doesn’t get lost by the mail carrier. Instead, you can use any of the following to handle receivables electronically, much faster and more securely:

  • Automated Clearing House (ACH)
    When you set up an ACH payments processer, typically through your bank or a third-party vendor, your customers can pay by check online using their account and routing numbers. If they need to make a recurring payment, they can set up automatic payments through your ACH account. That way they spend less time worrying about remembering and more time appreciating your business. The funds are available to you more readily than if they mail a check, and they are more secure.
  • Accepting credit or debit card payments online.
    On Cyber Monday, you don’t want to miss out because you don’t accept online payments. Even on a daily basis, customers like the flexibility of being able to pay with their credit card online. Give them that freedom, and they’ll be more likely to pay you – on time. Several providers offer an online payment portal that you can set up for your business. For instance, CollectPay Online allows Commerce clients to accept payment online or over the phone, as well as let their customers schedule their payments.
  • Lockbox and Remote Deposit
    Some businesses need to be able to accept paper checks still, and fortunately there are ways to make that process more secure and efficient as well. A lockbox will receive your customers’ checks, process them and send an electronic record of funds received to your bank on your behalf. That way you don’t have to keep track of dozens of checks and deliver them to the bank yourself. However, if you do prefer to manage the checks yourself, you can set up remote deposit to submit checks to your bank using your mobile device or a desktop scanner.
  • Receive payment from foreign buyers.
    If you sell internationally, you might receive a check in foreign currency. With incoming foreign currency wires, you can set up a secure wire transfer line for your customer to send a payment to. A bank with foreign exchange trading capabilities can then help turn those funds in to U.S. dollars.

Accounts Payable, or paying others.

When you receive an invoice from a vendor, it probably gets passed between multiple people for approval. Then a payment request is submitted, and you issue the payee a check. If that check goes through the mail, you don’t know when they’ll receive it, when the check will be deposited, and whether you’ll have available funds in your account. You can use ACH technology to set up one-time and recurring accounts payable payments. For a larger one-time payment, you may consider doing a wire transfer. With ACH or a wire, the time between cutting the check and seeing the funds taken out is as soon as the same day. You have a more real-time sense of how much in accounts payable is leaving your business. A wire transfer is also more secure than a physical check, and it’s possible to send them domestically or internationally.

Let technology handle all of it, from receivables to payables.

That’s right, complete automation is possible. Everything from invoicing to approvals to paying bills can be handled electronically. The customer receives an invoice by email and is invited to submit payment online (though you can also send a physical invoice if your client prefers). You can also set up reminders if they’re late to pay. For payables, you can review bills, approve payments and even pay your bills within the system. By handling all of your cash flow management steps in one place, you can also get a real-time view of the money coming into and going out of your business. There are several programs that help with automation – ours is called CashFlow Complete – and you should look for one that can work with the accounting software you use.

In addition to making it easier to get paid, tools like ACH, wire transfer and CashFlow Complete can make life easier for you and your team. Imagine what you could do with the time you usually spend on organizing invoices, tracking checks and updating spreadsheets. It can be hard to change your processes, but upgrading to new cash flow technology can help make your business more secure and efficient, and your customers will likely notice a difference.