For a small company, admin can become an expensive burden. Research has found the average UK SME spends 71 days a year on administrative tasks and 43% spend roughly £4.4 billion on administrative costs alone while chasing late payments.
But it doesn’t have to be that way. By accessing the right tools, small and medium-sized businesses can access the kinds of efficiency-saving technology that was once reserved for their large corporate peers.
“Technology has played an integral role in aiding cash flow for small businesses,” says Russ Shaw, founder of Tech London Advocates. “Businesses without access to large finance teams have been able to employ clever collaborative tools to drive efficiencies and cost savings.”
From apps that automatically chase invoices for you – reducing the pain of late payments – to software that helps produce professional proposals, so you can more easily maintain a healthy pipeline, technology can free you up to do what you do best: grow your business.
Here, we explore five different ways small business leaders can use tech to take the pain out of managing their cash flow.
1. Get easy access to account insights
Cloud-based accounting softwares, such as QuickBooks, enables you to access your accounts on the go through their mobile apps. Wherever you are, whatever you’re doing, you’ll be able to check in on your business performance in real-time and make informed decisions.
“You don’t need to wait on your accountant to get cash flow updates and predictions,” says entrepreneur and business coach, Mavis Amankwah. “Being on top of your finances and foreseeing any difficulties will help you to build a more sustainable business.”
2. Stay on top of invoices and chase payments
Late payments represent an enormous challenge for small businesses. According to a report by QuickBooks, small businesses in the UK can waste up to a whole work week chasing late payments, with 56% of owners using non-work hours to do so.
Technology can help to mitigate this loss of time. Online accounting software such as Xero will automatically send invoice chasers on your behalf, removing some of the awkwardness of chasing and nudging payments along preemptively. “Even just a quick automated message can remind a client that an invoice is due to be paid soon,” says Ben Michaelis, managing director of ThinkEngine.
3. Generate proposals more efficiently
Getting sales proposals out to clients quickly and efficiently will increase turnover, in addition to creating a healthy sales pipeline – but putting them together can be time-consuming and cause a backlog. Proposals can take an average of seven days to go from creation to client but those delivered in four days are 11% more likely to close. As many as 86% of salespeople are looking for opportunities to shorten the sales cycle to help them close more deals.
Using a tool such as Proposify can not only speed things up by creating templates and an easy-to-access library of approved product descriptions, images and case studies, it can also help you to track the performance of proposals once they’re with the client.
4. More options for payment
The easier it is to accept payments from customers, the quicker you’ll be able to make sales and get the cash rolling into the business. If you’re shopping around for payment options for your business, it’s helpful to weigh your options – and how technology factors into it.
Card machines are widely used for cashless payments, and an option to consider if you need multiple points of sale (POS) within your business. You can typically rent card machines through a rental contract, and many of them are now enabled with WiFi and Bluetooth.
Mobile technology has opened up additional payment options, such as Square and Lightspeed, that either turns your phone into POS machines or provide simple card readers. The set up process is straightforward and suitable for owners who operate on a smaller scale, and have access to devices such as a smartphone or iPad.
Snack company Made for Drink was able to use mobile phones to accept contactless and mobile payments. “We needed a technology solution that could quickly turn our inventory into cash. Using our mobiles was the best option for us to be able to quickly take payments by card with no delays or extra costs,” says founder Dan Featherstone.
As you deploy these tools to gain better visibility over your cash flow, make your investment go even further with an American Express® Business Card. It's accepted by all the aforementioned platforms, and you get up to 54 days to clear your balance, giving you the flexibility to spread costs and better manage your outgoings. Plus, you can earn Membership Rewards® points every time you spend.
Find out more about American Express Business Cards.
- The maximum payment period on purchases is 54 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date.
- Membership Rewards points are earned on every full £1 spent and charged, per transaction. Terms and conditions apply.