When you think about the challenges of starting a small business, concerns such as how to provide an interesting product and how to attract customers would no doubt come to mind. Indeed, finding your niche in the market is important to a small business’s success. However, that is only the first step. After your business is all set up and running, you will be faced with a major issue that is often initially overlooked—getting your clients to pay on time.
Show Me the Money, Please?
Cash flow is king in the small business environment. Delayed payments from clients could mean not being able to pay your suppliers and employees as promised. To ensure that your business can run smoothly, it is vital to be in full control of your accounts. An ad hoc accounting structure may seem more convenient in the beginning but will become confusing and unreliable in the long run.
Undeniably, the invoicing process can be tedious. It involves a lot of data and information, and business owners—especially those who also double as account managers—can be tempted to offer clients a simple outstanding balance amount instead of a proper invoice with a list of goods or services purchased. This is why many SMEs have now made the switch to online payment solutions that offer digital inventory management, invoicing, and bill collection.
At first glance, specialized online invoicing and payment solutions may seem like an additional cost for the company. But, consider the costs of all the paper invoices, print-out receipts, carbon copies, and postal supplies. Add to this the dollar value of lost invoices, late payments, and time spent on the administration of paper accounts, and you will find that digital invoicing will ultimately save you money. Some online invoicing solutions feature automatic recurring invoices and payment reminders, ensuring that you do not miss any payments.
In addition, creating thoughtful and tailored invoices for your clients makes your business look more professional and trustworthy. Having a documented list of each sale also helps clients feel more secure in their purchase and allows them to keep a mental gauge of each product or service and their respective costs. This means that they will remember you first when they need a similar product or service again. Furthermore, a detailed list aids with the processing of any claims such as exchanges or returns.
Despite the many benefits of online payment solutions, anxiety about transaction security is the main obstacle that prevents businesses moving from analog to digital cashflow management. Thankfully, Internet security has advanced by leaps and bounds and there are a myriad of legitimate and verified online invoicing platforms, including plenty of tools, such as an invoice template for Google docs, for businesses to choose from.
The Powerful New Ledger
Blockchain is a trending database technology that is revolutionizing the security of the e-commerce and online payments space. Renowned for being the backbone technology supporting Bitcoin and other cryptocurrencies, blockchain is moving into the mainstream with global companies making use of its cutting-edge Distributed Ledger Technology (DLT).
To briefly summarize the concept, blockchain stores data chronologically in blocks that are linked together to form a chain. Once formed, blocks and chains cannot be edited or deleted. The blockchains are then stored across numerous computers and networks, which form what is known as a distributed ledger. This distributed ledger is constantly cross-checked by all the members in its network, ensuring that any unauthorized changes are quickly rectified. The transparency and immutability of blockchain can help small businesses increase their cash flow through a variety of applications.
A central feature of blockchain is smart contracts. Smart contracts use blockchain technology to build and enforce contracts between users and their clients. Smart contracts build unchangeable chains of relevant milestones, executing contract actions when certain conditions are met. This automation of contracts between businesses and their suppliers or clients essentially cut out intermediaries, streamlines the cash flow process, and, in doing so, saves businesses time and money.
The adoption of blockchain technology also enables small businesses to accept cryptocurrency payments—instead of fiat money—with faster transactions and lower processing fees. With cryptocurrency blazing up digital trading markets, they are a new and competitive cash flow option for SMEs who are game enough to take the plunge.
Blockchain’s decentralized nature and security features protect every user’s sensitive personal, financial, and identity information, allowing businesses to rest assured that their client’s data will not be used for unauthorized reasons. This works twofold for businesses, removing their risk of handling and storing client data while guaranteeing higher privacy for the clients. This way, businesses reap the profit without the probability.
Small business owners have a lot on their minds. From maintaining stock to providing quality service, balancing accounts, and simply being available to attend to any emergencies, they have plenty to think about each day. By making the switch to online invoicing and payment, small businesses can better manage income and cash flow, while freeing up time to focus on things that really matter.
Modern technology is consistently delivering more efficient business management solutions to the SME space. Small business owners who want to succeed should keep in step with such advances and make the most of the tools designed to help them rise above the competition.