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Let’s not beat around the bush; cash flow management can make or break your business.
Failing to keep a close eye on the funds flowing in and out of your (physical or virtual) doors can lead to sticky situations (such as scraping the barrel to pay your employees and get your products and services into your customers’ hands).
To keep a handle on cash-related business stressors, we’ve compiled four ways you can up your business’ cash-flow game. Implementing these into your operations should not only help keep your business afloat (and your sanity in check) but give it the stability it needs to stick around for the long haul.
1. Keep track of your cash
Creating a financial forecast where you can monitor the cash coming in and out of your business, by week or by month, is a great first step when it comes to taking better control of your funds.
Having your finger on the financial pulse of your business will enable you to make more confident business decisions and avoid spending money you don’t have – helping you avoid falling into debt. A financial forecast can also help you identify when you’ll have extra cash at your disposal, or when the pool is likely to dry up, so you can take proactive actions to keep your cash on track.
To get the full picture, you’ll need to feed your profits and losses from your EFTPOS earnings (aka how much people have spent and how much you have to pay in card transaction fees) into your financial forecast. With the Tyro App and the Tyro Portal, Tyro customers can easily generate transactional reports over a specific time period, and from a specific location if you have multiple stores, to add these figures to your calculations—making it easier to keep track of your cash.
If numbers aren’t your thing, don’t fret; you can always consult an accountant to help you navigate this area.
2. Review your operations and reduce outgoing costs
Expenses are an inevitable part of operating a business; but you shouldn’t be paying more than you need to for a particular service, as little extras quickly add up to large amounts.
To ensure you’re not forking out more money than you need to be, take the time to re-evaluate your operations to see what you can cut, swap or streamline.
Here are some ideas to get you started:
- review your insurance policies, phone plan, and internet service to ensure you’re getting the best bang for your buck
- minimise energy costs by installing energy efficient products and integrating energy saving strategies into your workplace (Energy Australia has some handy tips on this)
- identify areas where you can reduce waste or improve production efficiencies
- get your negotiation cap on by chatting with your landlord and suppliers about better deals that may be on offer
- ensure you’re advertising to people who would actually be interested in your brand
- cancel subscriptions to services you’re no longer using
You might be surprised by how much you can save by making these sorts of changes.
3. Implement credit control
Most small-to-medium businesses have narrow margins, which means getting payments on time is critical to keeping operations running smoothly.
As a business owner, the best way to control your credit is by setting clear terms. This might look like setting a due date two weeks from the invoice date or, for ongoing services, requiring payment by a certain date every month. To encourage people to pay earlier, you can add incentives such as a slight discount or first dibs on a future product or service.
In a similar vein, it can be worth having systems in place to follow up on anything that’s overdue, to ensure the money you’ve worked hard for doesn’t fall through the cracks and cause hiccups to your business.
4. Generate new business
It goes without saying that one of the best ways to boost business cash flow is to make more sales.
New sales don’t necessarily mean new customers though. You can nurture the customers you’ve already got by providing them with top-notch service, which will hopefully lead to them sticking around for the long haul. If you treat them right, they may also start singing your praises to friends, family and colleagues, boosting word-of-mouth referrals (which is always a win).
Growing your customer base with an advertising campaign can also do the trick. This doesn’t have to cost you a fortune – posting on social media is a cost-effective way to promote your products and services, and build brand awareness.
Cash flow is the lifeblood of any business; and when it falls flat, so do your operations. That’s why it’s important to stay on top of your funds to keep your business steady and ready for whatever is thrown its way.