4 Essential Automation Strategies for Improving Cash Flow
Let’s face it – as a business owner, you’re busy. Whether it’s customer acquisition or fulfilling work requests, you have several things on your to do list that must get crossed off on a daily basis. This leaves little room on your plate for tasks that may be important but don’t help your company grow.
One of these essential tasks? Accounting. Tracking expenses, processing invoices, and calculating your profit margin all help evaluate your company’s financial performance and ensure you have sufficient cash flow. However, if you don’t have a skilled accountant that can crunch numbers, they become another tedious task for you to handle.
Fortunately, there are plenty of ways for you to streamline accounting processes. Here are four essential automation strategies that will improve cash flow and allow you to focus on growing your business.
Streamline How You Send Invoices
Many businesses don’t realize how much time and money they’re throwing away on sending, tracking and processing invoices. This is particularly true for the companies that are still processing invoices manually. Manually processing invoices is an outdated practice that robs your company of productivity and leaves it vulnerable to billing errors that can cost your bottom-line.
Stop sending out client invoices each month and automate the process instead. Billing and invoicing software makes it easy for companies to accurately bill their time, track outstanding client debts and eliminate billing errors.
You’ll even be able to track cash flow and juggle a variety of foreign currencies if you frequently work with international clients. As a result, companies that automate the invoicing process can reduce their costs by 29%.
Add On Fees Instantly
After analyzing more than 80,000 invoices from 93 countries, MarketInvoice found that 62% of invoices are paid late. Moreover, one-third of these invoices were paid more than two weeks after their due date.
This can significantly hurt a company’s profit margins, especially if you’re relying on that cash to fund other operations. However, it can be time-consuming to chase after overdue invoices. It can also be tricky to diplomatically charge a late fee.
Instead, automate the process with software that instantly tacks on late fees to a client’s bill once it’s past due. By knowing the process is automated and out of your hands, clients will be discouraged from missing payments in the future.
Unsurprisingly, your employees expect to be paid. For many business owners, this can be a time-consuming task – especially for small businesses. One study found that small and medium-sized businesses spend more on payroll-associated tasks than larger businesses.
Automation can reduce payroll processing by as much as 80% and save you considerably on time and labor. Online payroll software allows business owners to make direct deposits, file tax forms, and even makes sure you’re compliant with local, state, and federal payroll regulations.
Pay Bills Easier
Did you know that labor is responsible for 62% of total accounts payable costs? With the plethora of online tools and software available, there’s no reason for AP departments to continue reviewing invoices manually.
Streamlining the process will improve invoice accuracy, ensuring that you are paying the correct amount each month. Depending on the size of your company, accounts payable automation can reduce overhead costs. AP automation software will keep track of payment cycles, eliminate errors like duplicate payments, and make sure your invoices are paid promptly every time.
Technology has made it possible for small business owners, freelancers, and other professionals to become more productive while increasing their cash flow. Stop wasting time on routine tasks and let automation software take over so you can continue to focus on what matters most – growing your business.
Aaron Darke – Aaron Darke is a small business owner and new freelance writer. He has run marketing and creative agencies in both Australia and the USA since 2005 where he has gained experience working with companies large and small from global alcohol companies, small to medium businesses, and local non-profits.