Many researches in India and outside cited 84 out of 100 businesses are hurting from poor cash flow management. You might be earning profits but still struggling to pay your bills due to a lower cash balance. Hence, if more cash is going out than coming in, the business suffers from poor cash flow management.
Delay in payment from customers is the main reason behind poor cash flow. Businesses mostly rely on these collections to cover their expenses. If customers are not paying on time, it will result in the untimely payment of their vendors, lenders, and employees. Further, if it continues for a more extended period, it’ll harm business relationships and reputation, resulting in missed sales opportunities.
Issues Faced by Small and Medium Businesses
Let’s discuss some of the key issues faced by small and medium businesses.
1. Accounts Receivables Management
Accounts Receivable is the amount due from the customers, which is the lifeblood of any business. The problem arises when they don’t pay on time or don’t pay at all. The reasons can be a delay in invoicing and improper follow-up systems. It further widens the gap between debtors and creditors of a business.
2. Cash Budgeting
A cash budget facilitates the planning of expected cash income and cash expenditures. Being an essential aspect of any business, it can identify potential deficits and provides time to manage them properly.
3. Explore financing options/Credit financing
A business operates in a dynamic environment which can give rise to a sudden cash requirement. Taking loans from banks and NBFCs is often not feasible, resulting in missed business opportunities.
4. Improper Invoicing
Businesses are still handling their accounts in old and traditional ways, which often results in incorrect or delayed invoicing. It further stalls the process of collection from customers.
ZikZuk Technologies helps SMEs in Business Finance Management
ZikZuk Technologies is a Neo Banking platform for SMEs, to help them solve cash flow problems in the following ways.
1. Automated Collections/Payables
ZikZuk will send automated reminders to customers whose payments are due. It will help recover money faster by at least 15% and provide payment behaviour analysis of debtors.
2. Cash Flow Projections
ZikZuk provides real-time data of business activities, enabling 360-degree visibility of business finance. It helps in managing irregular cash flows by cash forecasting.
3. Cash Flow based credit
In case of business opportunities that require sudden cash/credit requirements, ZikZuk will help you obtain credit based on the business’s cash flow. It also provides connected banking where all the bank accounts are in one place for convenience.
A healthy cash flow keeps a business alive. Investing in a business’s financial management always pays in greater transparency and profitability. ZikZuk technologies is specifically designed to cater to all the financial needs of a business.