Remember the old adage—cash is king? But for businesses of all sizes, the reality is that cash flow is king. While digital transformation continues to reshape industries, many small and midsize businesses (SMBs) still struggle with cash flow management and growth limitations. Embracing a wider array of payment choices isn’t just about convenience—it is a strategic lever to unlock growth and improve cash flow.
According to PYMNTS, 90% of SMBs prefer receiving B2B payments electronically, and the investment to change operations and embrace digital payment systems is well worth the potential outcomes. Now is the time to digitize your payment systems, as your business will benefit in four critical ways.
Turn Cash Flow Optimization into Your Competitive Edge
First, digitizing your payments will optimize cash flow management across accounts payable (AP) and accounts receivable (AR). Digital tools make balancing AP and AR seamless and fast. Having dashboards that show the full spectrum of what is happening with your cash, all in real-time and in one place, gives SMBs maximum visibility into the financial health of their businesses. By leveraging technology and eliminating manual-based processes, SMBs can automate and streamline their finances, including invoicing, paying bills, and financial reporting—reducing human errors and increasing accuracy.
SMBs also need flexibility with different payment options to help them transact with certainty, securely, and efficiently in a way that makes sense for the unique needs of their business. With digital payment platforms, you can optimize cash flow through several different payment options, including ACH and real-time payments—making it simpler, faster, and easier to pay your vendors, freelancers, and contractors. SMBs can also make quick credit card payments, allowing them to optimize cash flow through deferred payments without incurring penalties or operational delays, benefit from vendor discounts for early payments, and even earn some rewards.
Lastly, wire transfers can also be easily managed and integrated into your platform. And if you conduct business internationally, a digital platform makes paying in local currencies easy and seamless.
Get Time Back by Maximizing Efficiency and Operations
Second, you can streamline overall business operations and save time by paying bills and tracking payments all in one place. We all know that SMBs are strapped for time and have limited resources, so anything that can increase efficiency has the potential to provide major benefits—including digital payments. For instance, online payments for businesses can reduce bill approval time by more than 50%. Plus, companies using online payments can significantly accelerate their cash flow by collecting money up to two times faster.
Like many businesses, Georgetown Visitation, the oldest Catholic girls’ school on the East Coast, used to devote countless hours to manually handling its AP tasks. With about 250 bills to pay each month, those manual processes proved to be both inefficient and time-consuming. Employees would sift through stacks of files to find answers to important questions. After switching to a digital payment system, the school reduced its time spent on AP issues by a staggering 75%.
Digital business payments can also offer SMBs more efficiency by making the process of paying and reconciling payments much more precise. By automatically syncing with your accounting software, you can help eliminate human errors and other discrepancies through better accuracy. Online payments can also be tracked at every step within and outside your company, delivering maximum visibility and control.
Finally, digital payments allow you to make payments from any computer or mobile device connected to your payment system, providing the convenience and flexibility to do business from anywhere you or your employees choose.
Safeguard Your Finances and Protect Your Business
Third, you will improve your financial security by embracing digital payment systems. According to The World Bank, two-thirds of adults worldwide use digital payment technology to make or receive payments. With this increasing reliance on digital payments, it’s more important than ever for businesses to provide the secure payment capabilities that customers and business partners expect. With digital payment solutions, SMBs can ensure that all transactions are safe, secure, and easy to track.
It’s no secret that paper check fraud is on the rise. Checks contain your businesses’ banking information, leading to security risks and even fraudulent payments if they are lost or stolen—impacting your bottom line. By eliminating paper checks and going digital, you can reduce fraud and minimize human errors with automated checks and balances to ensure consistency across your financial operations. Your financial data and documents are also safer on secure, encrypted, password-protected servers. And tools such as multifactor authentication (MFA) can add an extra layer of security to help prevent theft and fraud and protect your business.
As an added bonus, while you’re protecting your company from various payment frauds or risks, you will also have the electronic trail required—built into your payment system—to meet various compliance and regulatory needs.
Expand Your Customer Base
Finally, you can tap new customers and vendors by providing a broader range of payment options. As SMBs grow, they often seek to expand their vendor networks to improve cost, quality, and business efficiency. To make this happen successfully, businesses need safe and secure payment platforms that can deliver flexibility through different types of vendor payments catering to various needs. By offering more choices through a digital payment platform, your business can expand by appealing to new customer markets and an extended set of vendors by providing a personalized experience.
Digitizing your payment systems and infrastructure is a wise investment that can provide big benefits relatively quickly. Now is the time to begin—or continue your digital transformation journey by embracing digital payments. Clearly, your business partners and customers overwhelmingly prefer digital payment systems. Plus, your teams will reap the benefits of increased efficiency and accuracy. And you don’t want to fall behind the competition in delivering for your business. By investing in the modernization of your payment systems, you can expect to see significant results and a strong ROI over time.
Mary Kay Bowman is the EVP, GM of Payments and Financial Services at BILL. She has over 20 years of experience in global payments strategy, product development, and operations at the world’s leaders in payment technology and e-commerce.
Payments stock image by Vitalii Vodolazskyi/Shutterstock