How to run your business on the go and improve your cash flow
Guest post from Intuit Quickbooks
Most business owners say their mobile phone, not their desktop computer, is their most important business tool. Yet despite the new technology we have to manage our business, cash flow problems remain the number one reason 50% of new businesses fail in the first five years*. Why are so many companies making the wrong decisions and running out of money?
The solution could be in the palm of your hand, so here are some tips on how you can use your mobile to help improve your cash flow.
With the advancements in mobile technology and cloud storage, it’s perfectly possible to run a business from your mobile. Accounting software packages allow you to manage your books without ever needing to log into a computer, and they integrate into a vast ecosystem of apps and online services to help you manage your business, from your point of sales systems to CRM (Customer Relationship Management) platforms.
The convenience of using your mobile means you can be more productive in the time away from your office, whether it’s on the way to work or when you are at a client. In particular, sending out quotes and invoices as soon as possible will help ensure cash keeps flowing in to the business. With mobile technology you can invoice a client before leaving their office or the job site, so there’s no need to wait until you are back in the office or getting around to your admin.
Automate where possible
Gone are the days when small business owners have to rely on their accountants for a month end or even quarterly view on their profitability. As accounting software packages connect to your online bank information, you can see your profit and loss in real time. More importantly, you can look ahead to see your payable expenses and receivable income in the near future. This will help you spot potential cash shortfalls before they happen, rather than after, and make better spending decisions.
By automating a lot of your bookkeeping processes, you’ll save yourself on fees paid to accounting professionals for sorting through your boxes of receipts. Alternatively, you can use the same funds to invest in practical advice from an accounting professional on growing your sustainable profits. Businesses connected to advisors are 70% more likely to succeed than those without*.
Adopt systems that’ll have money in, money out
While poor financial management will generally cause a cash flow problem, some business models are more susceptible to it than others, either through high upfront costs, overheads or expensive inventory requirements. It is important to align the timing of your income with your expected costs, requesting deposits, part payments or shorter payment terms to ensure you are not carrying the cost of a client for too long.
Technology can help you get money in faster too. Whether you send invoices to clients or meet them in person, offering a convenient payment solution (such as Paypal or Square respectively) will ensure it’s easy for your customers to pay you. Research* shows that businesses with smart payment solutions enabled get paid on average two times faster than businesses who invoice the old way. For any customers that do run past your payment terms, you can set up automatic reminders to avoid the hassle of checking who has paid and chasing them up. You can also use your accounting software for access to loans or invoice financing to cover a shortfall in your cash position while waiting on future receivable income to be paid.
Accounting software can help
Cloud accounting software such as QuickBooks Online will help you improve your cash flow in a number of ways, all from your mobile phone or computer:
- Real time insights on your current cash position and outstanding invoices
- Implement deposits and progress payments for project-based clients
- Integrations to payments solutions to ensure you get paid faster
- Reminders to customers whose payments are overdue
- Managing inventory levels to optimize your spend
By implementing some simple best practice steps and technology solutions, you should be able to make cash flow woes a thing of the past.
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* QuickBooks research, 2018