If you run a small business, you already know how important it is to be paid on time to manage your cash flow effectively. Your startup capital, or what’s currently in your bank account, won’t keep your business going forever, so you must be able to predict cash inflows and outflows accurately.
If you don’t, you’re going to have bigger problems than paying bills. You will have a failing business if you don’t make decisions based on accurate financial information. You’ll likely end up spending more than you earn if you don’t have a clear picture of your business finances.
Fortunately, when you utilize business intelligence, you get plenty of information regarding cash flow so you can make smarter business decisions. And smarter decisions make for more successful businesses.
Here are four ways that business intelligence can improve your cash flow:
- Track who owes you money and how much they owe.
It can be challenging to keep track of who owes you money, especially when you’re working hard to make sales or provide services to keep your business running. But your company can quickly run into financial difficulties if you do not follow up on unpaid or partly paid invoices.
In the US, 13% of payments made to small and medium-sized businesses (SMBs) are late, according to a Sage study. Consequently, more than 30% of U.S. SMBs experience adverse effects on company investment and their ability to pay suppliers and provide bonuses to employees.
Business intelligence can prevent this by giving you a fast overview of everyone who owes you money. This makes it easier to know who to contact to get your invoices paid. The best business intelligence systems show you who owes you, how much they owe, how late they are, and who to contact about getting it paid. This essential data can save you as much as two weeks a year in chasing payments. It’s almost like a paid vacation.
- See what’s due and overdue.
Seeing who owes you and how much they owe is great, but business intelligence can give you powerful information about due and overdue invoices when it comes to chasing payments.
An easy-to-understand visual format makes following up on payments easier because it allows you to clearly see who owes what and when. This is information you’ll need when you contact customers about their past due invoices. Late payments can kill a small business, so you want to be well-armed to protect your own business.
If you begin to see a pattern of late payments, you can reach out and see how you can help your customers before their habit has a negative effect on you. When you can get payments reliably when expected, it becomes easier to manage your company’s cash flow.
- Keep track of what you owe.
Just as important as tracking who owes you, you need to track what you owe creditors. You don’t want to earn a bad reputation for your business by not paying your bills on time. Once again, business intelligence saves the day by showing you clearly what you owe, who you owe it to, and when payment is due.
Having a clear outline of expenses makes it easier to plan the month ahead. You can see what is going out and what should be coming in. When you have this kind of information, you are empowered to make the best decisions for your business.
Sometimes, no matter what you do, cash flow is down to a trickle. Fortunately, with the accurate insight you receive from business intelligence, you will have the information you need to renegotiate terms with your creditors.
Most creditors are understanding and would rather help you with mutually beneficial arrangements than lose the business relationship. This is especially true if you have maintained open communication in the time you’ve done business together.
If you can make smaller payments over a longer term, you keep your business going and salvage the business relationships you’ve worked so hard to build.
ASI Is Your Business Intelligence Solution
ASI has a business intelligence solution that fits your business needs. Sage business management systems can be customized for your small business and integrated with third-party products, so your business is efficient and profitable.
Ready to learn more? Contact ASI today for a free consultation. You have nothing to lose except all those late payments.