As a small business owner, you’ve learned how important healthy cash flow is. Understanding how to develop and maintain that cash flow, however, that's another story. Payments aren’t coming in, but your debtors are still going to call. You need systems and processes in place.
We've talked about the importance of a healthy cash flow before, but today this blog will focus on cash flow trends and what to look out for.
Variety is the spice of life, and when it comes to your cash flow, it’s essential. Diverse revenue streams increase both your short-term and long-term cash flow. Instead of putting all your eggs in one basket, you’re covering your bases.
Established businesses may be reinvented with new services and better customer experiences, and other businesses are increasingly looking to diversify too. New product and service lines may extend even into other fields, especially as newer technologies are coming onto the scene. Those fields that are emerging around the newest technologies will grow fastest of all.
It took a leap of faith to trust the cloud, one that many businesses were initially hesitant to take. Today, cloud computing is widely accepted, and many companies consider it an essential technology for the daily function of their business.
In contrast, cloud-based financial management apps are still treated with that early caution. While it’s understandable, it’s no longer helpful.
Cloud finance apps simply give you so much flexibility, and there are reliable, proven apps on the market that are secure and private. Some of the benefits include:
- Ease of use
- Dashboards to easily access important information
- Share resources and workflows internally, with access at all hours, every day
- Increased data security, accuracy, visibility and overall control of cash flow
- Streamline and automate business processes
Alternative payment options
Small businesses survive or fail on the strength of their cash flow. One major stress on your cash flow is late payments. Many customers don’t pay on time, but there are things you can do to increase the likelihood of being paid right away.
Namely, use alternative payment options. Stay front of mind by sending your invoices by email. Your customers can click a button to pay online from the invoice itself, while they’re looking at it, or pay by credit card or bank transfer online.
There are other options that are gaining traction, especially amongst sole traders and freelancers, including digital wallets, cryptocurrencies, P2P and eCash payments.
Big data is a trend that’s still growing. That’s because we’ve barely skimmed the surface of what we’ll be able to do with it in the future. As more data is collected and methods of analysis improve, especially machine learning, the more we can do with it. From predicting customer purchases by demographic to predicting the effect of weather on sales - the sky's the limit.
Instead of using those time-consuming, error-prone spreadsheets to collect data, move your team towards centralised methods of data analysis. This will give you better oversight over cash flow forecasting, as well as other parts of the business, and it has the added benefit of being more accurate and easier to use.
It can be hard to work out which of the latest trends in business are the ones to jump on board with, but when it comes to your cash flow health, you shouldn’t muck around. The future of cash flow management is exciting.
Get the right tools and advice so that your cash flow health is positive and success is in your future.