Business
HOW TO OVERCOME THE CASH FLOW ISSUES PLAGUING TOO MANY BUSINESSES
Published
1 year agoon
By
admin
Ian Duffy, CEO of Accelerated Payments
Cash is the lifeblood of any business, but cash flow issues haunt even the best-run companies. According to JP Morgan Chase Institute research, the average business has only 27 cash buffer days in its operational runway. If cash stopped flowing in, then within a month, most companies would not be able to cover rent or make payroll.
Smaller businesses have typically battled to collect prompt invoices from larger companies, as larger companies often use their market power to force concessions. This has only been made worse by the pandemic, with the number of unpaid bills almost doubling throughout the UK at the height of the COVID-19 pandemic.
When larger businesses do not promptly pay invoices, it is not usually for lack of funds. Instead, it stems from inefficient payment structures and the failure to accurately track or analyse data from suppliers. Many accounts payable departments still run on paper, with paper invoices being costly in terms of storage and riskier than digital records.
Invoices filed inaccurately can take a long time to track down. Invoices with incomplete information can automatically get blocked, which means that accounts payable departments cannot keep their original payment schedules. Most commonly, there can be slow approval processes, which lengthen payment turnaround times.
Electronic invoicing, also known as e-invoicing, addresses these issues. E-invoicing is the exchange of the invoice document between supplier and buyer in an integrated automated format. Digitising systems allow automation, converting manual flows into instant and computerised tasks and increasing payment processing speeds of every workflow.
The global market for e-invoicing is set to grow to £516 billion by 2024, largely due to widespread government adoption and technological innovation. As governments in many countries look for a way to tackle tax loss, they have started enforcing regulatory paths to encourage adopting the e-invoice practice. EU member states have brought in mandatory e-invoice legislation for public procurement.
Tech start-ups are also introducing new, practical solutions and making e-invoicing a cost-effective billing tool. Web applications allow a more robust user interface, enabling online submissions of invoices in multiple formats, increasing the adoption of e-invoicing across businesses of varying sizes and geographies.
While e-invoicing helps businesses better control their cash flow, it ultimately does not solve the root of many companies’ problems around late paid invoices. Sending automated reminders is one thing – but actually getting the liquidity into the bank to keep things moving is a game changer that can keep a company from going under.
According to the UK banking platform Tide, the pain inflicted to businesses by late payments is chronic and widespread: on average, one in six small business invoices are paid late. This varies between industries: small businesses operating in the IT and telecoms sector see payments arriving 12 days late on average, while small businesses in media (such as marketing, advertising, PR and sales) see payments arriving over 30 days on average.
However, if businesses have never-ending late invoice problems, e-invoicing will not ultimately be the only solution required. E-invoicing can manage the issuing and reminding of invoices but cannot guarantee prompt payment, as there are only so many late reminders that can be sent.
Instead, companies are being forced to be more innovative about how they collect payments. Some businesses have started offering discounts to encourage on-time payment. Other methods include changing how a company pursues unpaid invoices and the payment channels it will accept. Email and digital channels tend to be more effective than phone calls as employees continue to work from home. Subscription models can also lead to more reliable payment.
Another innovative approach to tackling the issue is single invoice financing. Single invoice financing helps small businesses get advances on cash they are due from specific individual invoices. Single invoice financing companies tend to work flexibly with an SME, choosing how many and which invoices they use. This provides easy access to funds without incurring fees on every invoice or financing an ongoing credit line.
Accelerated Payments Limited (AP) for example provides such a service in several European and North American markets. AP’s technology platform can streamline the settlement of invoices between suppliers and buyers as well as offering suppliers the option of funding some or all of these invoices. This gives suppliers the option to dynamically match working capital needs with a line of funding from invoice financing. AP is also planning to launch a service during 2022 that will allow third party e-invoice providers to use AP’s invoice financing module to provide their clients with invoice financing services.
The model works particularly effectively for smaller businesses that might be providing services for industry giants or larger companies with complicated organisational structures and approval processes. Companies that take advantage of the freedom and flexibility of invoice financing do not just use the funds to survive but can also thrive and scale, as they can simultaneously access credit or traditional forms of investment for further growth.
As more companies are paying attention to how they address the cash flow issues arising from late payments, they are also examining the broader context and addressing how to fund future goals around hiring, technological investment, and expansion. This is where invoice financing can go beyond a short-term solution and be a critical factor in long-term growth.
Business
How app usage can help brands increase their online revenues and customer retention
Published
1 day agoon
March 23, 2023By
editorial
Arunabh Madhur, Regional VP & Head Business EMEA at SHAREit Group
Brands are continuing to invest heavily in the e-commerce market despite current market and economic challenges – and they need to. Indeed, the current global e-commerce market is valued at around $5.5 trillion. Further to that, estimates show that online retail sales will reach $6.7 trillion by the end of 2023 – and e-commerce making up 22.3% of those sales.
So despite the economic and market climate, businesses must still plan for success and cater to customer demands to make the most of the global e-commerce opportunity.
Mobile apps are key
Mobile apps are now a fundamental component of retail, as they provide customers with a convenient and engaging way to shop from their phones. The past couple of years has been rocket fuel for digital transformation, providing an opportunity for the retail industry to innovate. Whilst global trends continue to point to the user growth of Facebook, TikTok and Instagram, the trends underneath the headlines highlight significant opportunities to drive new customer acquisition, which in turn demands a targeted customer retention strategy from companies.
According to research from Baymard Institute, 69.82% of online shopping carts are abandoned and with demand expected to continue, pressure is growing on retailers to expand current offerings and create personalised experiences to tackle this. One of the big challenges e-commerce companies face, though, is analysing and maximising the behaviour of users, and bringing down the cost of their marketing and engagement against how much is earned through a customer making a purchase.
To meet customer demand, mobile apps offer a variety of features such as push notifications, product recommendations, exclusive discounts and offers, and easy checkout processes, to make the shopping experience easier for customers. By leveraging the power of mobile technology, brands can create an immersive shopping experience tailored specifically to their customer’s needs, and this in turn helps increase customer loyalty, customer return rates, and maximise online revenue.
Re-targeting and re-engaging customers
Brands should focus on re-engaging with returning consumers through a personalised strategy as this can help increase the lifetime value of users, which in turn helps brands bring the cost of their marketing down knowing that brand loyalty has been achieved. According to research from Google and Storyline Strategies study, 72% of consumers are more likely to be loyal to a brand if they offer a personalised experience.
Optimising the online shopping experience is crucial in retaining customers. Today, consumers need a more ‘human’ touch, i.e., smart product suggestions based on buying history & behaviour that helps build a one-to-one relationship between brand and buyer. In particular, push notifications haven’t just enhanced personalisation but also increased app engagement by up to 88%. Push notifications have also proven to get disengaged users back, too, with 65% returning to an app within 30 days of the push notification.
Another strategy to consider is the option of adding buy now pay later (BNPL) options at checkouts for customers. Brands that add the option of financing at the checkout allow customers to spread the cost over time, which according to Klarna has resulted in a 30% increase in checkout conversation rates.
Publisher platforms allow brands to leverage their reach and sticky user base. Especially with open platforms such as SHAREit, which can help e-commerce brands create a strong revenue conversion with higher average order value with unique retargeting and user acquisition solutions. Because users are not just sharing product links, but also sharing e-commerce apps and deals among their community. Users of these publisher platforms are also encouraged to share products and apps through platform activities.
What the future of e-commerce holds for brands
E-commerce is positioning itself as a key facet in retail, and its future. With Advancements in technology, customers can access various products and services worldwide through their smartphones – making shopping more accessible than ever. Brands must put consumers at the heart of everything they do, like never before. Offering incentives and payment options, personalising customers’ experiences and re-engaging them, as well as targeting new customers, in an effective and un-intrusive way, are all ways in which they can influence purchasing decisions and improve retention figures.
Business
Does the middle market have a financial edge?
Published
2 days agoon
March 22, 2023By
editorial
Ilija Ugrinic, Commercial Solutions Director at Proactis
Companies tend to look up the ladder when searching for ways to improve efficiency and business performance. What are larger competitors, or others outside their industry, doing right that they can learn from and implement?
What smart technologies or bright ideas do they have that could create efficiencies for them, too?
As we enter yet another likely volatile year for business, punctuated by recession, should businesses continue to only look up? And could the approach of a slightly smaller business offer more of a competitive edge?
Large corporates tend to pioneer innovation in automation by simple virtue of the resources they have. Home to transformation directors and departments, with the ability to implement large overarching software systems, they pave the way for others and are often the first to digitise their source-to-pay cycle at pace.

Ilija Ugrinic, Commercial Solutions Director at Proactis
While growing businesses understand the merits of full automation, implementing it is often too expensive and it doesn’t bring the rapid realisation of benefits that they need. They need to consider what will bring them the biggest return on investment – and the reality is that those in the middle market don’t necessarily need all the elements of an ‘all-doing’ piece of software. What’s more, without dedicated personnel to project manage a transition, they frequently lack the currency of time to be able to comfortably transform working practices, and take staff with them on the journey, without taking resource from other areas of the business.
For SMEs, digital transformation has never been quite as seismic a shift. Instead, they tend to take a modular approach, employing digital solutions only for particular areas of their finance department, where they need them. This has never been a particularly strategic move. Rather, for a growing business that values quick results and watches their outgoings with greater scrutiny than their larger counterparts, it’s something that suits them better. A modular approach also comes with very little disruption and can be implemented relatively seamlessly into their existing organisational setups.
But while growing businesses are opting for a modular approach because it’s the most cost and time effective option for them, the benefits go far beyond that. The beauty of a modular approach is that it is agile. The last three years – with pandemics, an increasingly challenging climate and shifting geopolitical tensions impacting our global economy – have only served to remind us of how suddenly, and drastically, a business landscape can change. The companies that have weathered the storm are those that have reacted and adapted quickly – those that have been capable of changing the way they do things with little impact on day-to-day operations. A modular approach can offer just that.
Businesses using modular finance technology can integrate small solutions that sync up with the rest of their processes, quickly and seamlessly – and these systems can be integrated into their existing Enterprise Resource Planning (ERP), too. There’s no restriction of a monolithic or aging piece of software either – finance teams can add and update small solutions to their daily operations without the upheaval of having to replace or update large IT infrastructures or wider working practices within the business to accommodate the new software.
Unrestricted by entrenched and hard-to-change systems, the speed with which SMEs are able to react to market changes is miles ahead. A prompt software add-on to manage risk, or create a quick fix in response to a market shift, can be virtually a knee-jerk reaction. SME’s abilities to bend and flex to today’s world efficiently is seeing them reap the benefits of a modular approach. It’s lean, it’s fast and it’s facilitating their growth with a strong competitive edge. And as some of these companies’ growth propels them into the large corporate sphere, they’re choosing to keep a modular approach to finance. It will certainly be interesting to watch those middle-sized companies which grow to the extent that they find themselves competing in the same space. With no financial remodelling to assume a large ‘all-doing’ piece of software, they’ll be competing against their counterparts with completely different tools in their arsenal.
With technology, working life and business needs continuing to change day to day, we have another year ahead of us that will see companies running to keep pace with each other – and fast-growing companies’ approach to finance could be the silver bullet that enables them to catch up with, and even take on, big enterprises. It might just give them a competitive edge against large corporates in these turbulent times.
Magazine
Trending


How app usage can help brands increase their online revenues and customer retention
Arunabh Madhur, Regional VP & Head Business EMEA at SHAREit Group Brands are continuing to invest heavily in the...


Will ‘Britcoin’ change the way we bank?
The Treasury and Bank of England recently announced a state-backed digital pound is likely to be launched in the UK...


In-Store, Online & In-App – Unifying Payment Authentication
Michel Roig, President of Payment and Access, Fingerprints Often, new technologies are lauded as the death of existing ones....


Why the future is phygital
By Eric Megret-Dorne, Head of Card Issuance Services and Service Operations at Giesecke + Devrient Digital banking has become...


Why Keeping Track of Cash Is Key to Economic Survival
By Joshua May, Consulting Manager EMEA, BlackLine Finance and Accounting (F&A) has always had a reputation for its calm...


Does the middle market have a financial edge?
Ilija Ugrinic, Commercial Solutions Director at Proactis Companies tend to look up the ladder when searching for ways to...


Hybrid Intelligence – The only way to face the problems of the future
Author: Prof. Dr. Iris Lorscheid, Vice-Rector Research and Professor of Digital Business and Data Science Computer Science at the University...


Consumer demand driving sustainable payments
Jenn Markey, VP Payments & Identity, Entrust Sustainability is a buzzword that seems to be at the forefront of...


Adyen drives conversion uplift with advanced authentication solution
The company’s expanded authentication offering optimizes authorization, security, and end revenue Adyen (AMS: ADYEN), the global financial technology platform...


It’s time for financial institutions to take personalization seriously
David Hetling, Global Marketing Director, Financial Services, RWS Financial institutions will always play a critical role in society, offering...


The Future of Capital Markets: Democratisation of Retail Investing
Nicky Maan, CEO of Spectrum Markets Over the past decades, global capital markets have undergone tremendous changes. There have...


5 Often-Overlooked Investment Options To Consider Exploring In 2023
When choosing what to invest in, many people will initially focus on the stock market which is considered a more...


New Open Banking platform Archie waves a timely hello to Britain’s beleaguered businesses
Archie is a game-changing payments and data platform that’s inherently human in its approach; a refreshing proposition in the jargon-heavy...


Innovating inclusivity: How invoice financing is diversifying access to financial streams
“Entrepreneurs, particularly those in the supply chain in Europe, the United Kingdom, and indeed the rest of the world, frustrated...


The data behind AI’s success in the financial sector
Or Lenchner, CEO at Bright Data AI (Artificial Intelligence) has taken the world by storm. The OECD estimates that...


The Risks Of Company Mergers And How To Avoid Them
There are a lot of benefits to agreeing on a company merger with another business, and this includes, but is...


How diversity is evolving in the fintech industry
by Elena Dimova, VP HR Bulgaria and Operations & Technology at Paysafe. With both finance and technology being traditionally male-dominated...


How the Isle of Man is encouraging a new generation of FinTech innovators
FinTech’s potential to transform how finance and business operates has gained attention around the world in recent years. In 2022,...


Protecting Customer Data in Online Business
With the increasing number of online businesses, protecting customer data has become more important than ever. Cybersecurity breaches can cause...


END OF AN ERA OF CHEAP MONEY
Professor Milos Petkovic, PhD Lecturer at Berlin School of Business & Innovation Prior to 2022, the global financial market...

How app usage can help brands increase their online revenues and customer retention

Will ‘Britcoin’ change the way we bank?

In-Store, Online & In-App – Unifying Payment Authentication

Why the future is phygital

Why Keeping Track of Cash Is Key to Economic Survival

Does the middle market have a financial edge?

RBI’s MASTER DIRECTION ON DIGITAL PAYMENTS SECURITY CONTROLS

EMV® 3-D SECURE: ENABLING STRONG CUSTOMER AUTHENTICATION

HOW TO SIMPLIFY IDENTIFICATION IN THE GLOBAL DIGITAL ECONOMY WITH THE LEI

EXEGER – CHANGING THE PERCEPTION OF POWER

FUTURE FX PROMO

FutureFX Profile
Trending
-
News4 days ago
Adyen drives conversion uplift with advanced authentication solution
-
Business4 days ago
Consumer demand driving sustainable payments
-
Finance4 days ago
It’s time for financial institutions to take personalization seriously
-
Business3 days ago
Hybrid Intelligence – The only way to face the problems of the future