By Dafydd Llewellyn, above, Managing Director of UK SMB, Concur
For small businesses, the year ahead is full of uncertainty: the general election and final Brexit negotiations to name just two sources. Add to this mix the persistent discrepancies between large and small business payment terms and it becomes apparent why it’s extremely difficult for SMEs to keep a firm grip on their cash flow.
In the face of such uncertainty, small business owners have begun saving every penny to create a cushion against them and the world. And understandably so. Money in the bank gives you peace of mind. However, in the long-term, hoarding cash isn’t the right approach. Cushion savings are holding back vital resources that businesses need to evolve and grow. With this in mind, the below outlines the ways in which small businesses can open up insight into their cash flow and free up funds.
- Replace manual processes with automation: Many small businesses still handle their finance processes with a slow and cumbersome combination of paper invoices, forms and spreadsheets. This has to change – SMEs should look to automate their core spending processes. For example, an automated system that captures and processes your supplier invoices will reduce errors and effort. Furthermore, it also greatly improves visibility whilst collecting valuable data.
- Stamp out errors: Manual processes also invite one thing that SMEs need to avoid: waste. When your invoices are handled on spreadsheets and inputted by hand, human error is bound to occur. Rather than saving cash, SMEs should focus instead on recouping losses – and a good starting point is to stamp out duplicate invoices. OCR technology and auditing centres can make a crucial difference by quickly processing large amounts of invoices with minimal mistakes. The amount of duplicate invoices you pay will tumble – saving you time and money.
- Shut the door on fraudsters: Not only do manual processes invite mistakes, but they also invite scammers. Fraudulent invoices are a significant issue for SMEs today. And with many business leaders still handling them on spreadsheets, fake invoices do slip through the cracks. It’s another cost businesses simply do not need. And one that is easily avoided with the use of automated systems that automatically flag invoices that don’t match purchases or sales, or that have already been processed and paid.
- Make smarter decisions: Finally, the data garnered from an automated system is priceless, providing insights into spend and cash flow that can be used to anticipate future spend, identify patterns and single out deviances. This allows for greater strategic planning and can only be achieved through the use of technology.
Ultimately, the year ahead is littered with obstacles, but this shouldn’t mean small businesses have to shut up shop and wait it out. Instead, rather than looking to save money, companies should plug their cash leaks, from human errors to fraud, and take back control of their spend with automation. That way, they can invest in their business without the threat of uncertainty keeping them awake at night.