Last year, many organisations saw their cash reserves crumble as demand for goods and services plummeted due to the COVID pandemic. Where income-generation is tied into stock and supply levels, cashflow may have taken quite a beating.
As a result, many decision-makers have been finding ways to take pressure of finances through renegotiating contracts, restructuring, and optimising resources.
But there is a simple hack that is easily overlooked, and which can help get cashflow fighting fit again: Changing the way you pay for services and goods.
Currently, most businesses pay suppliers via BACS, CHAPs, and Faster Payments. These work well for suppliers, providing rapid clearance and payment. But funds also leave your business account immediately.
This can be an issue if the nature of your business is cyclical or seasonal with fluctuating demand.
Simply switching from direct payment to an alternative line of credit can turn this around, creating the ‘wiggle room’ required to take pressure of finances.
Suppliers still receive payment on time but you can keep money in your account for longer, giving your business the vital breathing space it needs to recover and grow.
Business credit cards are a smart option for managing supplier payments. Not only that, cards such as Allstar Plus offer customisable rules to help control spend by merchant category as well as additional benefits such as access to discounts.
Expense Card hack:
Your business pays for costs such as advertising, utilities and running costs via Direct Debit but it’s hard to have any flexibility of those payments.
Using a Business Credit Card to pay for expenses such as Google AdWords, electricity or communication costs gives your business flexibility to pay off a balance after the invoice date.
Your business is cyclical or seasonal, there may be days when cashflow sails pretty close to the wind.
When spikes are approaching, get extra payment flexibility by using a payment card to provide extra days credit on top of any invoice payment period.
You want to tap into attractive supplier deals online, often cross-border.
You control where your business expense card is used, ensuring you get the best deals, including eCommerce and at overseas suppliers.
As businesses seek more flexibility in supply chains and supplier payments, building ‘extra-time’ into cash cycles with flexible expense cards, can deliver a significant boost to all types and size of businesses, making them more responsive and competitive.
Why ‘give-away’ value that could be utilised by your business? Put in place these simple cashflow hacks and get your business finances in a great space.