Small businesses need to find ways to make their operations more efficient. It is easy for a small business – even one that is doing well – to find themselves caught in a liquidity trap, when the money that you need to pay is due before the money that you’ve earned from sales. This situation can lead to substantial problems; from being unable to make payroll, to being unable to pay your bills, and even having your credit score hurt.
Thankfully, technology has been developed to make these sorts of situations easier to avoid. Here are a few ways that technology can improve your cash flow:
- Automate your administrative tasks
Invoicing is one of the most time-intensive tasks for businesses without accounting software, like Sage. Having to manually keep up-to-date with the back-and-forth nature of payments can lead to massive frustration, and force your attention away from matters that are more deserving of your focus, like ensuring customer satisfaction.
You want to minimise late payments – an automated system will update you in real-time about which accounts are late. You can then take advantage of automated reminder emails that will be sent to the customers that have to settle their accounts.
- See into the future
While genuine foresight is beyond us, technology has allowed us to achieve greater insight into the prospects of a business. Utilising advanced budgeting software will give you the ability to keep in touch with what the year has to offer, and will give you the ability to prepare for those times in which your cash flow may suffer. If your business is affected by seasonality, this can be enterprise-saving.
- Check credit easily
Many small businesses rely on long-term, trusted clients. But extending that trust too far can result in your business taking a hit that it might be unable to recover from. You can protect yourself from difficult situations by taking advantage of easily accessible verification technology. At the most basic level, this may mean that you Google a client that is buying on account to ensure that there is nothing untoward about their business. But for large accounts, it is sensible to use credit checking facilities to assess the credit-worthiness of these clients. Protecting yourself against chancers is easier than ever, and the height of prudence.
- Improve your inventory
When you’re running a complex, multi-faceted business, you may not notice the inefficiencies in your business. Under-performing inventory can be a burden on a small business. Thankfully, with the right solution in place you can identify poorly selling stock before you notice it yourself. This can give you the leeway to sell your undesired stock at discounts, freeing up storage space and giving you the ability to stick to the things that really sell.
- Market your business better
Small businesses are the most community oriented area of enterprise around, and word-of-mouth has often been the most effective marketing tool. But if you’re not taking advantage of the vast opportunities that the internet provides, you’re doing your business a disservice. Your intricate knowledge of your target markets can be used to get your business selling across the world. Take advantage of tools such as Google AdWords, Facebook advertising, and e-commerce portals, to acquire client leads more reliably.