Furthermore, the difficulty in paying business expenses on time due to poor cash flow management can impact future profits. This reason plays a large part in why a significant 75% of small businesses fail — and a lack of profits is not the culprit; it’s poor cash flow.

Thankfully, it’s never too late to learn how to optimize and enhance cash flow in preparation for business growth in these challenging times. Here are five cash flow management tips that could benefit B2B companies.

1. Before Cash Flow Management, Start with a Plan

During the early stages of business, securing the appropriate funding from a bank is not easy. However, you can always seek advice from an expert and form a resilient business plan. They can help you outline your business strategy, management strengths, risks, and market potential.

Multiple sources of funding and support are available for businesses. So long as your business model’s viability is conveyed appropriately in your business plan, it could allow you to secure credit, capital, and even grant support. 

2. Maintain Your Books

On principle, every properly managed business should update its accounting information regularly. Whether it’s client invoices, supplier payments, or tax obligations, it is crucial to track your financial transactions.

Keeping up-to-date records will provide insights into potential cash flow challenges or overlooked areas. For example, if your revenue is falling, you can plan for the necessary actions to increase it.

It would also let you know when cash is running low, and you might need to start prioritising your expenses. You may consider investing in accountancy services to calculate the metrics and review your cash flow projections.

3. Take Charge of Your Invoicing

Another way to improve cash flow management is to send invoices on time. After all, it is the key to getting paid for your business.

Consider asking for upfront deposits or even instalments, which will help you pay the bills and avoid heavy debts. Following up on past-due invoices can be difficult, but you can adjust your company’s payment terms by setting a timeframe for payments, i.e. 30 to 60 days.

You may also require clients to pay upfront before delivering your goods or services.

4. Get a Business Finance Health Check

Business financial health checks will grant you a more in-depth analysis of your cash flow, pinpointing your company’s highs and lows. Only then can you correctly time your borrowings, organise the size of your staff, and strategise for additional marketing.

5. Know Your Numbers for Proper Cash Flow Management

As mentioned, gaining control over your accounting system will allow you to track your receivables and payables. Not to mention, this information is critical for your business parameters, such as the operating margins, inventory turnover, etc.

For instance, you can better determine the best time to order inventory without overstocking or know when to take action when margins are shrinking to prevent losses. Monitoring cash reserves would also ease the burden of covering unexpected bills and upcoming expenses.

6. Begin Improving Cash Flow Management with EzyProcure

EzyPayment is a credit-card-to-account payment solution that aids B2B businesses in enhancing positive cash flow. Partnered with banks embracing virtual card adoption, you can now use credit cards to purchase inventory, pay rentals, insurance, etc.

Moreover, businesses can enjoy up to 60 days of interest-free credit term while suppliers receive their payment within three days. Learn more about how EzyPayment works in your favour!

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The Covid-19 pandemic instilled an urgency in digital payments never seen before in the B2B landscape. Since then, businesses have discovered a gaping hole in the inefficient financial systems that still rely on manual, paper-based processes.

With employees working remotely, paper invoices continued to accumulate in office inboxes. Buyers and suppliers soon realised that they couldn’t reconcile nor access payments without a proper digital solution.

Now, disruptive payment technology has allowed people to network all across the globe, and businesses are more willing to make the transformation. On cue, we’re here to walk you through the many benefits of shifting to digital B2B payment.

What is B2B Payment?

Business-to-business payments are transactions made between two companies. Unlike other forms of payment, such as business-to-customer (B2C), B2B payments are a more complex process.

Thankfully, digital B2B payment options offer more effective financial services, expediting the process of issuing invoices, receiving, and processing payments. They also help businesses to improve cash flow and streamline collections.

The Problem with Paper Checks

Paper-based payments are more costly and time-consuming than one might imagine. Aside from a single check being expensive to process, it would also take a long time to clear.

Moreover, paper check payments entail numerous challenges, including: 

• Slowing down the payment cycle and causing delays.
• Increasing susceptibility to fraud for businesses.
• Reconciliation is time-intensive and highly fallible.
• Allowing customers to close the account or set stop payments.
• Making it difficult to track incoming checks. 

On the other hand, B2B payment solutions are less costly, safer, and easier to collect as the funds transfer directly into business accounts.

Benefits of Digital B2B Payments

1. Convenience & Accessibility

Modern, automated B2B payment solutions allow clients to pay invoices anywhere at any time with just a single click. With the manual processes out of the way, businesses can save costs and time previously devoted to invoice processing.

2. Secure Transactions

Digital B2B payments are significantly more safe as most platforms are built on a robust security infrastructure and data encrypted. Besides, most platforms are now regulated. In addition, these solutions make it easier to address potential vulnerabilities in supplier management, payment files, and treasury systems.

3. Higher Traceability

Payment details will be safely stored in merchant-specific databases, allowing parties easy access to payment information that they need. Consequently, suppliers and clients can prevent ambiguity or confusion by simply tracking their payments.

4. Faster & Simplified Payment

Studies have shown that the more payment options are available, the faster companies receive payment and leave room for expansion. Now that digital solutions have simplified the payment process, businesses utilising them can expect cash flow optimisation and, subsequently, growth.

5. Productivity & Efficiency Boost

Staff can be more efficient and less error-prone when focusing on primary tasks without worrying about manual payments. Not to mention, integrated B2B payment solutions can provide transaction reports to ease reconciliation.

EzyPayment as Your B2B Solution

EzyPayment solution is dedicated to helping businesses improve cash flow and productivity. Our navigable and easy-to-use platform allows buyers to lodge credit cards and pay invoices to suppliers. Alternatively, it also enables suppliers to pull payment from buyers’ credit cards when their invoice is due.

The platform’s payment process supports bulk payment uploads, multi-tier approvals and features automated email notifications. Perhaps the best part is that users may possibly reap savings from early payment discounts from suppliers and enjoy cashback, miles, or points benefits if provided from their bank!

Find out more about EzyProcure’s B2B payment solutions in Malaysia.

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