How Entrepreneurs Can Use Technology to Boost Cashflow
Posted on 7th February 2017 in Business
Written by James Marren
Maintaining a positive cashflow is rule one of business and if you can get that right, everything else tends to follow. While it used to be easier said than done, technology is changing that. The cloud is disrupting every industry and, for business owners who prefer doing what they love rather than working on the finances, this is one blog to read and bookmark.
Automate, automate, automate
Entrepreneurs who are willing to embrace technology can enhance their business efficiency by automating almost every possible admin task. The days of monolithic Excel spreadsheets being your only option to record expenses and invoices are, thankfully, fading fast. Cloud accounting software, such as Xero and QuickBooks, integrate with your bank account and update daily, providing you with the information you need on who owes what and when.
Xero’s App Market Place has 500+ time-saving apps that are designed to solve your business needs. Chaser and Debtor Daddy, for example, allow you to set an automated email to be sent to customers when an invoice is nearing its due date. These have helped businesses in some cases improve Cashflow by as much as 50% in just 6 weeks.
Knowing the health of your business is vital and there is no better place to start than your Cashflow forecast. FUTRLI is designed to make the process enjoyable – I know, trust us, it actually can be. It automates the admin that would put you off in the first place, for example, it automatically syncs with your cloud accounting software, so you don’t need to manually update a spreadsheet. You can invest your time exploring into several possible future scenarios. This means you are always up-to-date and ready to action changes whether that’ll lead to more profit or a crisis averted. When you plan and look ahead, you’ll be ready whatever life decides to throw your way. None of this is voodoo magic, it’s readily available technology that business owners are taking ever more seriously (and you should too), because of the time saving potential it affords. In essence, automation will allow you to allocate your time to other things that will drive your business forward.
Optimise your business operations to avoid hidden costs
There are many tweaks that you can make to you business operations that can help save you money and boost your Cashflow.
Something as simple as requesting that your clients pay with direct debit can make a big difference to being paid promptly. InvoiceSherpa and GoCardless are simple to use and take any stress out of direct debit processing. They integrate with your accounting software too and typically have low transaction fees around the 1% mark, providing a boon to your Cashflow.
If your business needs to transfer funds internationally, TransferWise is your friend. It has saved people and businesses £22m in hidden bank charges. Use this service too and you’ll no longer be at the mercy of extortionate Bank fees, and with just a 0.5% transaction charge and no hidden fees, you can save a significant amount.
Another great move is to switch your timetable around so that you do your payroll and accounts once a week, rather than once a month. This allows you to break up what is otherwise a heavy process into more manageable chunks and that will help you really keep you on top of your Cashflow.
Technology helps but don’t forget the human touch
We mentioned Chaser and Debtor Daddy earlier who can help automate your collection process. However, you can still influence a good collection process yourself. Checking your clients are happy with your work, invoicing them immediately etc all contribute to “good manners”. Sometimes just communicating what is going on and explaining why cash is so important to you as a business owner will be enough, most people are reasonable after all. If they still aren’t able to pay, ask why and see what compromise can be made but be careful to remain firm.