Starting up a business is a complex undertaking. It can also be unpredictable. You can only do so much to plan ahead, but protecting your finances gives you a better chance of dealing with the unexpected. Which is why cash flow is so important, especially for startups.
When you realise that nearly half of all startups fail within the first five years, you can see just how important it is to keep a steady stream of payments coming in from customers in a timely fashion.
Get cash flowing into your business
Getting a business up-and-running can be an exciting time. Understandably, many entrepreneurs feel pressured to focus on their product or service in order to make it as attractive as possible and maximise sales. But, as a result, the importance of setting up good processes to handle the payments for those sales is sometimes neglected.
And that’s a big mistake!
Your cash flow has to cover all of your expenses for each month and if payments aren’t coming in, or being processed fast enough, it falls behind. It’s then, when your business can start running into trouble.
Which is why startups must focus on every element of the payment process to optimise cashflow. At this stage, it’s not all about profit – it’s about not running out of cash, as the business is finding its feet. So it’s vital to ensure that your cashflow projections are realistic from the outset. Achieving that means having the right payments strategy in place.
Technology is the best friend of startups
The key to getting this right today is technology. Older payment systems used by traditional banks can be slow, bureaucratic and cumbersome. New ones, such as KoalaPays, have been designed to be fast, efficient and flexible.
With KoalaPays, you can manage your finances in a way that works for you with our dedicated business bank accounts. They are user-friendly and allow you to quickly convert currencies, transfer funds and be in control of your money. It’s equipped with comprehensive reporting tools, payroll function, shared users feature and much more.
Furthermore, our business accounts and services are evolving all the time. We’re always looking to add value for our business customers by making our systems compatible with your own and packed with features and functionalities that make it easier for you to do business. A good example of this is our separate accounts for each currency. This makes it much easier to keep costs low when taking overseas payments in different currencies.
Stay on top of credit control
At the heart of any good payments strategy is a strong credit control function. Set realistic credit limits, make sure your customers are clear on due dates and, above all, insist that invoices are paid in a timely manner. If necessary, introduce penalties for late payments. If you’re at all unsure about a new customer or business partner, carry out a credit check.
One of the most useful advantages of new technology is that most of the processes dealing with the collection of payments can be automated, so you spend less time dealing with payments and more time focussing on sales.
With the right payments strategy, you can take the effort out of credit control, get paid faster and streamline all your payment mechanisms. Once all those fall into line, you can focus on your core business and grow your profitability.
Talk to a representative at KoalaPays for more advice on getting the right payments platform set up for your needs.