Companies can maximize their profitability in the coming year by embracing tech-driven tools that optimize accounting tasks. See what fintech trends are boosting growth in 2020.
The pathway to growth for most small and midsize businesses is not without its obstacles, surprises and mistakes. It’s also never been more accessible.
Trends in Fintech, the combination of technology and financial services, have helped streamline how smaller businesses operate. Providing them with more financial flexibility and other benefits. Usually, those enjoyed by bigger companies with access to more favorable banking relationships.
At the core of these trends is the concept of linking a business’ financial accounts so that everything can be done more efficiently. This includes customer invoicing, paying bills and processing payroll, which helps lower unnecessary costs.
This also leads to better business intelligence. Enabling you to more accurately assess and project the key factor in ensuring steady profit growth: your business’ cash flow.
Few strategies are likely to help boost your business growth in the coming year as much as improving how you manage your cash flow. Consider that more than 80% of businesses fail because they simply run out of money.
Here are some of the ways that you can leverage Fintech tools such as FINSYNC’s accounting and cash flow management platform to maximize your business growth next year.
Close Funding Gaps
Every small business runs into funding needs from time to time, and FINSYNC makes handling this easier than ever. One example is FINSYNC Pay, which enables firms to use their credit cards to pay bills that might otherwise only be payable with cash or check.
Users can make payments over email, without the need to share sensitive credit card information. This opens the door for cash-strapped businesses to tap their credit to cover the cost of rent or any other expense without the need for the recipient to have the means of processing a credit card payment.
Another way technology is helping give small businesses more financial flexibility is with invoice financing. This is when you borrow against the amount that your customers owe you.
Also known as accounts receivable financing and factoring. These loans are typically processed in less than a day, with lenders generally advancing around 85% of your invoice immediately. This beats waiting 30, 60 or even 90 days for your customers to pay you. And with FINSYNC, all it takes is one click to turn your invoices into cash.
Online lending companies offer a great alternative to traditional lenders when it comes to tackling bigger financing needs. These Fintech-powered lenders have capitalized on the gaps in financing left by conventional lenders in recent years, emerging as a reliable source of financing for small businesses.
Why? Because their loan application process is typically far less onerous and lengthy than a traditional bank. In addition, alternative lenders will also consider small businesses with higher risk profiles. Roughly 32% of all business loan applications last year were handled by alternative lenders, up from 24% in 2017, according to data from the Federal Reserve. Traditional lenders are increasingly funding loans through alternative online lending platforms, a trend that’s expected to continue growing next year.
Businesses that use FINSYNC’s all-in-one platform can easily apply for a loan free of charge. They immediately receive offers from lenders offering the best loan options. Whether it’s an alternative lender or a bank or credit union.
Automate Invoicing, Payroll & More
Innovations in digital banking have brought about more transparency, automation and speed to fund transfers. And if you’re not incorporating new technology into how you invoice your customers and pay your bills, you’re incurring unnecessary costs.
The timeworn approach to invoicing is probably familiar. You provide a product or service to your customer and then submit an invoice right away via snail mail, unless you don’t, and it ends up not going out for a day or three, or a week.
Then you hurry up and wait, as they say, until your customer pays the invoice. It could be 30 days, it could be longer. Multiply this scenario across several customers. This could leave you with a severe cash crunch while you wait for the funds to arrive.
Of course, invoice financing is an option, but you can also avoid payment delays by automating your invoices. FINSYNC links up your various financial accounts and can automatically send out invoices on a time schedule that will make it more likely for you to be paid faster and in a way that supports your upcoming financial needs.
The system also reminds your customers automatically with email alerts whenever their payment is due or behind schedule.
Automation is also a game-changer when it comes to making payments. By syncing up your bank and card accounts, you can set your bills to be paid automatically, all while keeping an accurate tally of your expenses. No more wading through receipts in physical or electronic formats to try to sort out whether a bill was paid.
Most businesses can also improve their profitability by using automation to process payroll. Software that automatically tracks your employees’ hours and generates the required payroll saves money because it’s more efficient and minimizes errors.
This comprehensive approach to tracking and leveraging your own data is going to continue to give your small business an advantage in an increasingly competitive marketplace. All it takes is placing your business accounts under a single digital ecosystem like FINSYNC’s cloud-based accounting platform.