These past years have not been what anyone would call an easy ride. The global pandemic forced businesses to change the way they operate, often on the fly. And while some have been able to adapt and thrive, others have struggled to keep their doors open.
Cash flow has become increasingly critical as businesses have had to find ways to stretch their pounds further. This has led many companies to seek out new and innovative ways to improve their cash flow and efficiency.
One area that has seen a lot of growth in recent years is fintech. Fintech, short for financial technology, is a broad term that covers any type of technology that can be used to improve financial services. This can include anything from mobile payments and online banking to investing and borrowing platforms, and offers a range of benefits that can help businesses improve their cash flow and efficiency.
However, with new fintech startups appearing every week and over 800 fintech apps now built specifically for SMEs (Xero, 2021), navigating the fintech landscape and knowing where to begin can be a daunting task. Therefore, in this article, you’ll receive advice on how your business can harness the power of fintech to improve cash flow and efficiency.
Cut your admin time and run a more efficient payables process
How much time is your team spending on accounts payable (AP) processes? AP processes can often require substantial manual time input, and the associated tasks are often repetitive and mundane, leaving them prone to human error. Accounts payable automation, as its name suggests, refers to tools or procedures that automate the manual aspects of accounts payable. Most AP automation tools enable you to electronically submit and approve purchase orders and invoices, and the most effective tools will also read invoices and extract information on their own, eliminating the need for any team members to enter any data. As a result, you can drastically cut your costs and time spent on your accounts payable process.
Make better business decisions and improve your cash flow
Accurate and effective cash flow forecasting is important and can mean the difference between success and failure for a company. By being aware of your future financial situations and identifying potential cash surpluses or shortages, your business can take the guesswork out of critical decisions and make better, more informed decisions about where to allocate resources and how to best manage finances.
Using a cash flow forecasting tool that integrates directly with your accounting software instead of doing it manually in spreadsheets can help your business save time and effort, and eliminate the possibility of any potential human errors that might occur, which could negatively impact your business and cash flow.
Streamline your expenses process and keep accurate spend data
Manual expense processes are error-prone, time-consuming for both your staff to submit and your finance team to process, and often result in missed opportunities for cost savings. As businesses typically wait for employees to report their spending and submit their claims, there’s often a delay in data for how company funds are being spent. This can cause a lot of issues as the monitoring of margins, costs, and ROI can be inaccurate. By using an expense management software or tool to help streamline your expense process, you can not only save time and money, but you can also ensure that your business’s spend is completely up-to-date at any point in time.
So, if you’re running your expense process across multiple, disjointed platforms or tackling expenses submitted in different formats and across various company cards, you know what you need to invest in.
Save time on accounts receivables and put an end to late payments
If your business sells on payment terms, you know that late payments can have a severe impact on your business’s cash flow. In fact, in the UK alone, SMEs are owed £50 billion in late payments (CPA, 2021), and research indicates that late payments cause up to 400,000 business failures (FSB, 2022).
Being on top of your accounts receivables and getting paid on time has never been more important.
However, managing your accounts receivable is both hectic and time-consuming, and as a result, many companies do not have the resources to do it successfully. That’s where credit management software comes in. By using fintech, such as Chaser, finance teams can get paid faster and save more than 15+ hours per week on their credit control activity.
Instead of tracking and managing your debtors in spreadsheets and spending countless hours manually sending payment reminders, credit management software automates this entire process for you and your team. A good example of an end-to-end credit management software is Chaser. With Chaser, you can count on support throughout the entire credit control journey. You’re able to credit check which customers to grant credit to, monitor debtors, chase payments via SMS and email, set up payment instalment plans, collect payments via the Payment Portal, and escalate to debt collections.
Access to all these receivables functionalities in one place minimises late payments and speeds up your processes, improving your business’ cash flow and efficiency.
Improving cash flow and efficiency through the power of fintech
Repetitive and manual tasks can be a drain on your time and resources, so automating as many of them as possible can have a significant impact on your business. By using fintech to improve your cash flow and efficiency, you can free up time and resources that can be better spent on other areas of your business. In doing so, you can help to improve your bottom line and unlock new opportunities for growth.