Learn how to optimize your cash flow with electronic bill payment while dealing with the unpredictable disruptions of COVID-19.
“Cash flow” is a frequent topic on our blog, where we often stress how crucial cash flow projections are for the health of any small business. This discussion could not be more relevant than right now. As our economy grapples with the consequences of COVID-19, more and more businesses can’t predict tomorrow’s financial outlook. Many businesses are still worried about the liquidity of their business despite getting approved for a PPP or EIDL loan. Whether you’ve secured funding, are still waiting for your payout, or didn’t apply for a coronavirus relief loan, there are even more ways you can further optimize your cash flow using electronic bill payment software.
Tap Into an Existing Line of Credit
Credit cards can be an excellent safety cushion, particularly because the funds are available immediately. You can use credit cards to either delay the impact of expenses until sales pick up, or help your business stay afloat while you wait for other funds to become available.
These days, it’s easier than ever for vendors to accept credit card payments — even for traditionally cash-only payments, such as commercial rent. Intuitive payment platforms allow you to request a credit card payment with only an email address. It’s simple for both you and your vendor: You can send a payment using your credit card, while your vendors receive it in their preferred payment method, be it ACH or check.
However, before using your credit cards, it’s important to get an overview of your cash flow for the next 15 to 30 days.
Two weeks or a month may seem like a short period of time, but given how much things change from week to week in light of the coronavirus, planning for future revenue or expenses can be difficult. Software with a cash flow projection feature can simplify the process by automatically pulling your accounts payable and accounts receivable.
A 30-day period is also typically the window before credit card balances start to accrue interest. Unless your credit card comes with a 0% interest rate, that payment will be included in your projection. Additionally, a 30-day period can also account for a PPP or EIDL loan payment you may be waiting for, as these funds are usually received within 21 days.
Schedule Invoices to Maximize Cash Flow
Scheduling your invoices is a simple way to maximize the inflow of money into your business. Recurring invoices provide more predictability to your cash flow. You get a steadier stream of monthly income and can make better predictions about what expenses you can and can’t cover in the upcoming weeks. Scheduling invoices also helps your customers get into a payment routine with your invoices, which can help eliminate late payments.
Beyond that, using electronic bill payment software automates your invoicing and frees up time, allowing you to shift your attention to critical areas such as marketing and sales, which are more important than ever during an economic downturn.
Make It Easier for Customers to Pay You
If you’re turning to electronic payments, chances are your customers are, too. To help you retain more clients, it’s important to give clients the opportunity to pay you with a credit or debit card, or an ACH payment instead of a check.
Ease of payment will ensure payment continuity and improve your cash flow, especially if your small business was relying on cash payments before. If accepting credit cards is new to you, it’s simple to set up a merchant account in a matter of minutes so you can accept credit card payments.
To further simplify the payment process, you can send your invoices online and include a link where your customers can pay you. Enable your clients to pay you with one click, and simplify your accounts receivable management.
Turn Paper Checks Into Electronic Payments
Do you have clients that insist on paying by check? There’s a solution for that as well: lockbox. With a lockbox, your checks will be converted into electronic payments and deposited into your bank account as ACH payments. You never even have to see the physical check.
While lockboxes eliminate the threat of contagions, they also streamline your back office when connected to your invoicing software. A lockbox payment automatically changes the status of the invoice to be paid and gives you visibility into when the cash will be available in your bank account.
If you’re ready to take control of your cash flow and implement more electronic payments, try FINSYNC free for a week. Our all-in-one platform allows you to send payment requests electronically and easily accept credit cards. You can also pay your bills through the same platform. Both of these features come together in FINSYNC’s cash flow projection tool that allows you to see how your small business is doing financially.