Originally posted on the Bill.com blog.
You’ve done it! You’ve successfully transformed your passion into a viable business. But before you deem yourself the “Ultimate SMB Rockstar” you need to face the cold, hard reality of business.
80% of new companies will fail in the first year.
Now, we don’t say this to scare you. In fact, we think you're awesome — we want your business to succeed! And the best way to do this is through your finances.
Sure, 80% of businesses may fail, but what are the key reasons why? According to this report:
- 29% of small businesses fail because they run out of cash.
- 82% fail because they experience cash flow problems.
Which is why we’ve compiled our top five ways to ensure your business's financial success.
Tip #1: Go digital.
Small businesses don’t run at a leisurely pace. And your payments shouldn’t either.
The days of printing and mailing communications, invoices, and payments have gone, and what’s replaced it is technology. The cloud can now easily handle tasks that were formerly bound to paper.
When you migrate financial tasks to digital platforms, you’ll gain the following benefits:
- Real-time data for accounts payable and accounts receivable
- An accurate view into cash flow to help with reporting and forecasting
- The ability to access information from mobile phones and tablets, so you’re never without the important business information you need
- Greater efficiency overall
Tip #2: Automate invoicing.
Creating and sending invoices can be an absolute pain. Even if you have digital invoices, you still have to enter remittance information, contacts, and more. Even worse — some businesses create digital invoices but still print and mail them to customers. This works against a quick payment cycle.
Paperless payment solutions let you send invoices electronically and automatically. They populate relevant data in each invoice. You can create, review, and send an invoice in a matter of minutes.
You can also arrange for the payment solution to send invoices automatically to customers at a set time each month (week, quarter, year, date, etc.). Simply schedule the invoice delivery and the system will send it. By automating parts or all of the invoicing process, you save yourself valuable time and reduce the number of resources typically dedicated to it.
Tip #3: Accept online payments.
Why make it difficult for your customers to pay? Restricting options, like only accepting paper checks, means your business has to wait longer for payments. For an SMB, a reduced waiting time means your company has the cash it needs to thrive.
With an online business payment solution, your customers can opt for a variety of ways to pay — ACH transfers, PayPal, Venmo, credit cards, and more. More options mean less time scouring your books looking for payments.
Tip #4: Pay your bills.
Okay, it happens to all of us — bills often get lost or overlooked. But in business, failure to pay or a slow payment can lead to dire results. It can impair vendor relationships and even interrupt the distribution of your products and services.
Combat this by moving to an online bill payment solution. The solution will take each invoice, route it through the correct approvers, send reminders, and let you pay immediately or on a scheduled date.
In short, it acts as your own bill payment personal assistant. You won’t forget a bill, plus you’ll have a built-in audit trail for each transaction and a centralized place to store all bills, payment histories, contracts, and other related documents.
Tip #5: Trust your accountant.
There’s often an urge for SMB owners to DIY finances. But this desire to save money or retain complete control can backfire.
Get an accountant. And get one quickly.
An accountant advisor brings a powerful set of skills to the SMB table:
- They’re your company’s go-to for finances and cash flow.
- They bring strategy and best practices for processes, security, and cash flow management.
- They help you pinpoint how much money your business needs to stay afloat and how to ensure you have enough to support plans.
- They advise you on pricing services or products, company valuation, and expansions or additions.
- Their experience can streamline (or even handle) time-consuming tasks such as AP and AR.
In short, the right accountant who is experienced in your type of business offers everything you need to avoid any cash flow challenges or money shortages.
It’s time to reinforce your company’s finances and become the SMB rockstar we all know you are.
Read more tips on building a successful business on the Bill.com blog.