positive cash flow
is often one of the most difficult aspects of running a small business. Even when business is booming, that 30-day lull between sending an invoice and receiving payment can be the death knell for small businesses in perennial debt.
But thanks to relatively recent advancement in business-to-business electronic payments, you can cut the time making deposits at the bank and waiting for checks to clear, as well as streamline processes such as invoicing and collections.
We’ve identified some of the most common online financial tools that can help you keep your cash flow positive by cutting the time it takes to receive and deposit your payments.
, you can use their online system for three basic payment functions:
Accept payments through credit cards, eChecks (using ACH processing), mobile payments, an interface that enables you to enter phone and mailed payments, and online payments from your website and invoice.
Streamline billing through electronic invoices, automated recurring billing, and a central location for customer communications.
Manage customers with customer records, reports, and integration with accounting software.
For entrepreneurs who receive fairly steady payments, PaySimple may be a good choice for keeping payments and billing organized. The full package costs $34.95 monthly plus transaction fees which, generally speaking, fall in line with standard credit card rates.
PayPal has been the leader of the pack in electronic consumer payments for years, and it’s not surprising its business-to-business Online Invoicing
package is a popular choice among small business owners.
Like PaySimple, Online Invoicing allows you to:
Send an electronic invoice.
Allow your customers to pay by credit card, bank account, or PayPal.
Use an invoice management system to track the diligent and the deadbeats.
Online Invoicing doesn’t include as many payment choices, billing features, or customer record options as PaySimple. But for small business owners who deal with a relatively small number of invoices and payments, it offers a key differentiator: No monthly fees and fairly standard per-transaction fees.
Your Bank’s Electronic Invoice and Payment System
As banks have found it’s easiest to retain customers who rely on them for multiple services, many offer invoice and payment systems similar to PaySimple and PayPal’s Online Invoicing.
Bank of America, for example, offers Paymode-X. This online payment and invoicing system (that sounds like it’s straight from a Marvel
comic) contains fewer features than either of the previously mentioned competitors, but it will get the job done.
Depending upon your bank, the features may be more extensive. At a minimum, you can expect a basic way to send invoices and receive payments electronically. Fees also vary from bank to bank.
If you’re tired of tracking invoices and payments in a homemade spreadsheet then running to the bank so the check will clear before you’re in a cash crunch, you have solid options available to improve your cash flow situation.
About Business Owner’s Toolkit
With an emphasis on problem-solving dating back to 1995, Business Owner’s Toolkit™ (www.toolkit.com) offers more than 5,000 pages of free cost-cutting tips, step-by-step checklists, real-life case studies, startup advice, and business templates to small business owners and entrepreneurs. The site also offers a monthly newsletter, up-to-date news topics, and Ask Alice!, a column that closely follows industry trends and provides trusted advice to inquiring site visitors.