Article provided by EasyBiz
Cash flow is the main concern of 59% of local small and medium enterprise (SME) owners, as revealed in a recent survey conducted by Intuit QuickBooks and World Wide Worx. Considering that cash flow is the lifeblood of a business, by being equipped with the latest technologies, small business owners will be able to better manage their cash flow in order to survive and thrive.
This is according to Nadine Chetty, cloud accounting specialist & co-founder at Ecomm Accounting Solutions and an Intuit trainer/ Writer Network member, who, speaking in light of Savings Month, says that many small business owners in the start-up phase encounter cash flow issues as they use Excel or Word to create their invoices. “Essentially, they conduct their businesses based on the balance of their bank account and have no way of tracking in real time what money comes in or goes out.”
“Additionally, most start-ups don’t have an accounts department to manage their debtors and creditors, so it takes much longer for money to come in than to go out since they often pay suppliers immediately, but struggle to get paid on time by their clients.”
With this in mind, Chetty shares some of the ways that technology can assist start-ups with boosting their cash flow management in order to grow their businesses:
Cloud accounting software:
This enables business owners to manage their cash flow from anywhere and at any time. Their books can be accessed either online or via a mobile app, with the latter enabling them to create and send invoices on the go.
Mobile card readers:
By being equipped with a portable device for processing credit and debit card payments, business owners can receive their money instantly. These machines can also be linked to cloud accounting software for payment tracking, which also ensures that the payment is matched to the invoice that was sent.
Payment reminder functionalities:
Designed to take the stress out of having to follow up on payments, some cloud accounting software is equipped with the capabilities to send out a polite reminder on the business owner’s behalf if an invoice is unpaid or overdue, which helps them to receive their money faster.
Cash flow forecasting software:
This technology imports the latest data from cloud accounting platforms, analyses it and compares cash flow scenarios. Business owners can then formulate strategies based on this information.
“Over and above helping entrepreneurs to manage their cash flow, these technologies also provide them with a real time view of their business, enabling them to make informed decisions. Automation and artificial intelligence (AI) are making mundane tasks simpler and in doing so, freeing up business owners’ time to focus on their customers and grow their business. What’s more, FinTech companies are now providing finance by looking at businesses’ performance via their cloud accounting software which means that small businesses can possibly receive funding quicker and with less hassle,” shares Chetty.
When it comes to implementing technologies like these, she advises that business owners first do their homework and test out a few different options to see what each has to offer before settling on which one works best for their needs.
Looking to the future, the cloud accounting specialist foresees that accounting software will prevent business owners from making certain payments or purchases depending on their current and future cash flow situation. “There is also technology being implemented abroad and coming to South Africa later this year that will enable them to retrieve their payments directly from the client’s bank account immediately on completion of a job. Moreover, AI will be increasingly involved when making decisions regarding the cash flow of a business.”
“As such, in today’s day and age, small business owners should note that if cash flow is the lifeblood of any business, then technology is the heart that keeps it pumping. Therefore, now, more than ever, it is vital for them to invest in this in order to survive and thrive,” concludes Chetty.