According to studies, SMEs spend on average, a whopping £4.4 billion per annum chasing late payments. This problem is only exacerbated by traditional (and slow!) payment methods too such as cash and cheques, so what is the solution to this?
To reduce the time between invoicing and the money actually clearing into your accounts receivables – thereby minimising the negative impact on your cash flow – small and medium businesses should consider switching to digital payment. Here’s why.
6 benefits of switching to a digital payment process
1 . Consistent cash flow
Digital payments mean a faster processing time which results in a much faster cash conversion cycle. This means no more big gaps in cash flow due to late payments.
2 . Lower processing costs
Switching to digital means lower payment processing fees than standard bank transfers. As there’s no need for manual reconciliation, labour costs are also reduced.
3 . Greater visibility of your finances in real-time
Businesses that use a digital payment process always have their accounts receivables in real-time. This allows them to refine their credit control processes and make informed strategic decisions.
4. Quicker reconciliation
Digital payments don’t take days to reconcile, they show up on your accounts receivable almost instantly. The result? Better documentation and more time for your staff to focus on the high-value stuff instead.
5. Happier clients
Going digital benefits your clients too as it gives them the widest and most convenient range of payment options to choose from. Making it quick and easy for your clients to pay makes them happy and it builds loyal relationships too!
6. Security compliant
The vast majority of software providers abide by the Payment Card Industry Data Security Standard (PCI DSS). This means all business and client data can be processed securely.
Wave goodbye to late payments
Payment delays can build and threaten the future of your company. To avoid potentially irreparable damage, implement digital payments sooner rather than later. Not only will this balance out your monthly cash flow and reduce manual work and extra costs, but it will also improve your client journey and most likely ensure repeat business.