The Power Of Combining Apps To Maximise Success For Your Business
In the UK, 50,000 small businesses fail each year due to cash flow management issues with 52% of invoices being paid late, according to Xero’s ‘Getting Paid in full and on time’ report. Delayed payments and poor forecasting are crippling small businesses around the world.
However, SMBs that use Cloud technologies grew 26% faster and are 21% more profitable than those that did not. The correlation is undeniable, embrace and implement Cloud applications into your business and you will increase your chances of success.
One of the most important things to track in a business is cash flow. Cash flow is the measurement of cash moving into and out of a business. According to a study by U.S. Bank, 82% of businesses that go bust do so due to poor cash flow, highlighting the need for financial planning in businesses. Traditionally, cash flow forecasting has been done in spreadsheets, which are both time-consuming and difficult to understand for most business owners.
But with the advent of Cloud technology, cash flow forecasting tools like Float have made financial forecasts far more accurate and easier for business owners to understand. Operational forecasts allow a business owner to see the daily fluctuations in their cash flow, and provide insight into where they’ll be next week, next month, or next year. An operational cash flow forecast allows business owners to make data-driven decisions with confidence.
How cash flow forecasting can help
Forecasting your cash can help you to preemptively spot any cash surpluses or shortages coming your way. Giving you enough time to put the necessary plans in place to cover a cash shortage or make use of a surplus. Afterall, forewarned is forearmed.
However, your forecasting tool is only as good as the data that goes into it. The two main contributors that influence cash flow are Receivables: the money your customer’s pay you, and Payables: the money you pay your suppliers.
Receivables usually get all the attention. A business owner’s natural response to improving cash flow, is to get more cash in through the door.
However, reducing costs and processing time in your payables and having up-to-date data is equally as important to the success of your business.
The traditional Accounts Payable process is riddled with hidden costs. It can take up to 40 days for the bill to arrive at the accounts department and complete its authorisation journey before being paid. That’s before considering human error and overpayments.
Research has quantified the average cost of processing a single bill at £25 in the UK. However, with automated tools, this process can be shortened significantly.
Reducing a 40-day process to minutes
With automation tools such as Lightyear, Payables time can be reduced to minutes and costs reduced to pennies within one Cloud application. By automating mundane tasks like line by line data entry and approvals processing, you can free up time to allow your team to focus on growing your business. But it doesn’t stop there, real-time Accounts Payables data ensures:
- You have real-time business insights at your fingertips
- Your business can take advantage of early payment discounts
- You keep track of your outstanding debtors
- You can accurately plan your cash flow.
The power of the connected Cloud
Lightyear and Float are two great examples of best in breed applications that can deliver even more value when used together. There are many powerful Cloud-based apps available on the marketplace, but by harnessing the combined power of these tools, your business can ensure it is set for success.
For more information on how your business can get a real-time view of your Accounts Payables, visit lightyear.cloud.
For more information on how your business can benefit from cash flow forecasting and management visit floatapp.com.