Business owners are generally more consumed with managing daily operations than with finding ways to improve business performance.
But while monitoring, predicting and managing cash flow are essential business functions, failing to search for ways to improve cash flow, such as creating new revenue streams, could hurt your business.
Business owners can leverage these helpful tools and use them as tools to improve cash flow management.
Technology That Helps Create Cash Flow:
- Smartphone-enabled credit card readers: These make it easier for clients to purchase because of the added payment option. Also, they make it easier for businesses to connect with new customers at large events.
- Viral deal sites: Groupon, LivingSocial and Angie’s List can help acquire new customers who are missed in other marketing efforts.
- E-commerce sites: Even with a website, this is a good way to reach new customers. As a result, users are able to collect lead and customer data for email marketing and increase visibility of deals and promotions.
Technology That Helps Accelerate Cash Inflow:
- Accounting software: When automated, invoices go out on time and helps keep up with collection of receivables.
- Dashboards and Calculators: Software that creates dashboards can help monitor changes in average collection period of receivables, identify the biggest credit risks and lengthy past due receivables and flag increases in inventory days. Some apps even help calculate cash flow impact given changes to financial metrics.
- Remote check capture: This technology can decrease the average time frame for check collection. This is particularly beneficial for businesses with multiple locations forwarding checks to main location. Some banks will offer this for free or low cost to business customers.
- ACH debit: This helps to speed up the collection of payments, creates predictable collections for recurring, periodic payments and gives immediate credit for deposits.
- Credit card payment acceptance: Fees may be higher, but credit card payments on a past due account may be worth it in order to secure the payment.
- EBPP or EIPP: Allows the business to email a bill directly to the customer and include a link to payment options.
- Other digital payment options: Amazon Payments, PayPal, Apple Pay – eliminate the need to bill some clients for services.
Technology That Decelerate Cash Outflows:
- Accounting software: This can be used to set up the accounts payable system to automate payments for just-in-time delivery.
- Credit cards: Business owners with inexpensive credit cards can use them to pay a bill at the end of the 30-day payment period, then pay with cash when it becomes available. This can delay ultimate cash flow depending on grace period.
- ACH credit: This service allows you to credit another account to settle on a specific date (check first to see if bank charges for using this).
It is important to recognize technology trends that affect your industry. Staying up-to-date on current technologies helps you remain competitive and enhances your company’s financial well-being.
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