Cash Flow Tips to Make your Business Thrive
Make it easier to pay and get paid
The problem
Even though online payments such as ACH, EFTs, and eChecks are on the rise, a report found that almost half of all businesses still rely on paper checks for payments.
You might say, if it’s ain’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 eat up time and resources with similar, labor-intensive processes. It takes a while 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 game 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-heavy processes of paper-based review and checks. And you won’t have to make a bank run or wait 30+ days for payments. The customer clicks a button and authorizes payment, and it lands in your account.
Unite accounting solutions and apps
The problem
Activities that affect your cash flow occur in different systems that aren’t talking to each other. You can only get a partial idea of what’s happening.
The solution
Integrate your accounting solutions and apps. QuickBooks®, Xero™ and NetSuite®, for example, serve an important purpose. But if they don’t have all the information, they can’t accurately present your cash flow. If you use other accounting apps, connect them to your accounting solution so that information automatically syncs between systems.
Added bonus—you don’t have to bother with manually inputting information from one system into another. Who has time for data entry? Probably not you.
Capture a real-time snapshot of your finances
The problem
For companies, outdated tools like paper checks and invoices, can impede cash flow clarity.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, accounting solutions capture activities as they happen and reflect the real-time status of your cash flow. That amount in your bank account? Well, it’s going to be that much closer to perfect as it reflects ACH transfers and customer payments without a 45-day wait for end-of-month reports.
Cultivate stability
The problem
You’re waiting for customers to pay. Did they get the invoice? Did they pay? Why haven’t they paid? Did someone call them to remind them to pay?
Meanwhile, your cash flow is dwindling.
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 Netflix 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. You set up invoices to send automatically. Your customers authorize automatic payments. That way, on the first of the month (or whatever day you select), your customers’ payments land in your banking account.
Make it easier to access
The problem
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, you can’t get at it whenever you need it.
The solution
Adopt cloud-based accounting technology solutions. You can access your secure information via PC, laptop, smartphone or tablet. You can check your cash flow and activities with a mobile app and a few taps. You have the information you need when you need it.
Bonus tip: Use the past to prepare for the future
The problem
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. Perhaps 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.
