Financial technology, or FinTech refers to a range of financial services software that are commonplace in the 21st century. Many small businesses use financial technology in their day-to-day tasks, and FinTech is changing the ways that small businesses manage concerns with cash flow.
Managing Cash Flow with FinTech
Take a look at these 7 ways FinTech helps small business owners manage cash flow challenges.
Business loan funding and investing
FinTech makes it possible for businesses to obtain the funding they need. Many small business owners used to only chose to work with small, local banks, but FinTech has made online lending simple and fast, boosting the popularity of this option even for small business owners. Fintech has increased the awareness of cryptocurrencies like Bitcoin to help fund small business or make other payments. Bitcoin provides a different approach to payments, offering flexibility to business owners and their clients at the same time. For those businesses interested in making investments to grow money, the earnings calendar is a great place to start. The earnings calendar can help small business owners to help understand another company’s true financial condition and will act as a guide in the investment and trading process.
Electronic invoicing
The ability to get paid by customers is critical and having the ability to automate these payments is a major way FinTech helps small businesses reduce cash flow challenges. Global payment systems make getting paid simple and instant, no matter where on the globe the money is coming from. Technology reduces the amount of human interaction required to process those payments. The less personnel required to get the job done means less cash the business has to pay. A study by the Cambridge Centre for Alternative Finance found that more than 3 million people are actively using cryptocurrencies. Interactions are going on all over the world every day.
Rental management
Everyone is getting in on this FinTech revolution, even property managers and landlords. New tools make it possible for them to manage properties and tenants remotely. They can send rent notices and accept payments with their smartphone. Business owners of all sizes are always looking for ways to boost productivity, and FinTech allows that.
Cybersecurity and privacy
Unfortunately, data leaks aren’t totally unavoidable, and they’re a real threat for all types of businesses. Small businesses must keep their data secure, as well as the data of their customers and vendors. This expense is often one they’re not prepared to handle. FinTech makes cybersecurity a possibility; various software packages exist to help business owners improve their defenses. Even the not-so-tech-savvy business owner can install and manage the software and, thanks to FinTech, can speak with the gurus who are savvy from the comfort of their very own office.
Get cash from invoices instantly
When invoices are paid with payment terms of 90 days, startups often have to hand out free loans. Waiting 90 days for the payment to be made is not something many small businesses, especially startups can afford. It’s likely to cause these businesses to miss out on opportunities.
There are several startup resources that offer a range of options that allow businesses to finance these receivables instantly. Professional investors have the opportunity to finance these invoices for a small fee. The biggest killer of any business is running out of money — 82 percent fail due to poor cash flow management skills — and FinTech allows small businesses to have access to their money much sooner than ever before.
Account management tools
There is an endless number of critical tools for SMB success, such as managing client profiles and account. The professional-level tools were once unattainable for small businesses that had less cash, but FinTech now makes these accessible and affordable. It is common to see a business that has business credit linked with accounting software to automatically pay off their line of credit, credit card or loan without human interaction.
Automate monthly payments
Direct debit isn’t new, but it’s much more than a way to take customer payments. Today businesses allow startups to automate the process of taking variable payments, one-off payments and fixed subscription and membership payments. Not only does this improve the timeliness of these payments, it removes the possibility of human error, which delays the payment process.
FinTech makes it possible for businesses to serve their customers no matter where they are in the world in real time. They can accept payments, pay employees and manage inventory while spending less money than many could have ever imagined. Many parts of FinTech are intertwined into business operations, making it hard to imagine operating without them. FinTech is an innovation that has taken the changed the world; it’s is thriving globally and isn’t slowing down.
How does FinTech help your small business manage its cash flow?
Photo via Shutterstock