Jacinta Jones, our Head of Transactional Banking, shares some tips and tools to help set you and your business up for cash flow success.
What is cash flow?
Put simply, it is the money that comes into your business from sales, finance or investments. The other side of the equation is the money that flows out to cover the expense of running your business.
We know it’s not always a smooth ride. Cash flow can be ‘lumpy’ when those two sides don’t balance.
Decreased sales, slow invoicing or stock shortages will impact your cash inflows. Likewise, your biggest bills don’t always fall after your busiest trading period. You may also need to invest in staff, equipment or stock before you see a return.
While many business owners use a line of credit or an overdraft to provide the buffer they need, there are other ways that you can improve your cash flow by leveraging the tools you’re already paying for.
Transparency can be just as powerful for your business as having the money in your bank account. If you have a clear view of what’s happening in your business, you’re in the best position to be on top of your cash flow.
Jacinta says “being able to take control and make decisions about working capital comes from being able to see the financial health of your business.”
Using reporting features in your accounting package can provide valuable insights and help you forecast your cash flow needs.
Another opportunity to better manage cash flow is by streamlining your administration.
“Business owners are in the thick of it all the time,” says Jacinta.
“They need a great product or service, and they need to keep money coming in the door. They’re so busy with product development and the day-to-day running of their business. Sometimes they don’t have a moment to think about the details, like the best way to receive payments from customers.”
Finding quick and simple ways to receive payments and reconcile accounts can make a big difference.
How to make cash flow management as simple as possible
Send your banking data automatically to your accounting software.
If you’re using an accounting software provider like Xero or MYOB, Bendigo Bank can help you streamline your business banking and accounting. We can arrange daily feeds of your transaction data straight to your accounting package.
Having up-to-date information in your accounting package about your working capital gives you real-time clarity about where your business is at. Use the dashboard tools to help you forecast your cash flow needs and understand the health of your business. Knowing what you need and when you need it can help you prepare for outgoing payments, smooth out funds and put you in control.
Register your business’s PayID
If you’re one of our business customers that receive payments by bank deposit, Bendigo Bank can set you up with PayID. PayID lets your customers transfer money to you in real-time, speeding up access to incoming funds.
In addition to including a BSB and account number or BPAY Biller code on your invoice, you can include PayID details such as your ABN or another unique reference. You may already be familiar with PayID through your personal account. It works the same way for business.
Giving your customers a quick and easy way to pay you means payments appear in your account in as little as five seconds. Using PayID also adds security. Your customers see the title of the account before they send you the payment, meaning funds won’t go astray because of incorrect account numbers or BPAY reference.
Make the most of the Tyro Portal and Tyro App features
Bendigo Bank powered by Tyro customers have access to great features via the Tyro Portal and Tyro App.
The portal will show you all your inbound payment data in real-time. Improved visibility and insights into your takings can help keep track of incoming funds. Understanding your cash inflows will help you make decisions about how you structure your outgoing payments.
Seamlessly transferring your banking data into your accounting software, keeping money flowing into your company as regularly as possible, and keeping track of your sales through an online portal, can have a big impact.
Streamlining these systems will save you time and effort, freeing you up to focus on planning and revenue-generating.
Jacinta adds, “I think it is important to remember our customers didn’t go into business to go into admin. They went into business to deliver their customers a product or service that they are passionate about.”