How you can use online tools to better manage cash flow

How you can use online tools to better manage cash flow

Online tools to better manage cash flow.

As UK businesses continue to struggle with a third lockdown, many will be thinking of ways they can maintain business continuity. For those that can, this means selling their products online. 

In the past, many small businesses would have relied on paper receipts or physical invoices. This meant it took longer to get paid, and records didn’t get updated in a timely fashion.

The pandemic has changed things. Those traditional at the core are discovering that digital processes offer far greater scalability and resilience. 

When connected to Xero, an online invoice payment service like GoCardless or Stripe helps businesses get paid up to twice as fast. Here’s how online invoicing can help you:

Get paid anytime, anywhere

Businesses who accept online invoice payments through Xero get paid faster. Adding a ‘Pay now’ button to your online invoices lets your customers pay you instantly, so you can save time chasing payments and reduce your admin burden. You can also give them many different ways to pay your invoices. With Stripe, you can accept credit card, debit card, and Apple Pay payments, and through GoCardless you can automatically collect direct debit payments on the due date.

Get paid on time

Having the right tools to effectively manage your cash flow is always important, but never has been more truly felt than during the past year. Xero Small Business Insights data shows us that small business revenue continues to decline in the UK.

With all of this uncertainty, cash is often tied up in late payments. This can have a huge impact on cash flow, and is the number one reason that small businesses fail.

This means you’re not only spending valuable time chasing invoices, but you’re also dealing with the lack of cash flow in your business.  – Read more

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Prospering in a post-COVID world

I’ve been a small business advocate for well over three decades now, but, it is incredibly heartening to learn just how valued small businesses are across the UK in the wake of COVID-19. 

A new study released today highlights the outpouring of goodwill towards small businesses that has only grown in the UK since the pandemic began, and reinforces society’s dependence on them.

The community spirit we’ve experienced since lockdowns began has translated to consumers choosing to support their own local businesses. The findings show that 66% of consumers in the UK have pledged to buy more from small firms locally.

That support will be music to the ears of businesses like Manze’s Pie and Mash, where hungry punters have been lining up to buy handcrafted pies, green liquor and eels for more than a century.

With three branches across greater London, Manze’s is a stalwart in its local community, feeding generations of families like the one that has owned and run the business since day one. 

There are tens of thousands of small businesses around the UK that have the same impact. In fact, 69% consumers surveyed for the study said that small businesses play an active role in shaping the culture of their local area, and they would feel a personal loss if they were to close. – Read more

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Financial basics for your business

Financial literacy is important for everyone but it’s essential if you’re in business.

Most businesses fail due to lack of cash, not profits

One definition of financial literacy is “The ability to make informed judgements and decisions regarding the use and management of money”.

For business, it is understanding where your money is coming from and where it is going. It’s also knowing how to use this information to make informed decisions, resulting in better outcomes. 

So, it’s crucial you understand your cash flow and keep an eye on it every day.

Our purpose at Xero is to help make life better for people in business. So I want to highlight three tips for new business owners.

Bank reconciliation

A bank reconciliation ensures all your bank transactions are recorded and categorised in your business’ accounting system. 

If performed daily, or at least weekly, you’ll have an accurate and timely view of your cash position. It also tells you how your money is being earned and spent. 

You can quickly gauge whether you can afford to pay your bills and employees. You can also produce financial reports to see what products and services are most profitable as well as what expenses need to be reigned in.

Budgeting

Set yourself financial goals for the business and write them down. Once you understand the ins and outs of your business, you can use this as a basis to build your budget. 

You can compare your actuals with your budget to help stay on track, and also make adjustments if your circumstances changeFor example, you could shop around at different suppliers to see who has deals or offer discounts to cut down on costs.

It’s a useful tool to keep your business moving forward and help with making informed decisions. – Read more

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