This guest post was written by Ben Murphy, Sales and Partnerships Manager at Spotcap NZ.
Cash flow is the lifeblood of any business and the most important metric that fuels growth. Cash flow management isn’t as mysterious as it sounds; it’s simply the act of balancing business income against business expenses. But, as Kiwi business owners know all too well, managing cash flow is never this simple.
Xero’s Small Business Insights showed that in 2017, payments to Kiwi business owners averaged four days late on 30 day invoices. Late payments can be so disruptive to cash flow levels they can push a profitable business into insolvency.
So how do we get people to pay up?
There’s an old saying that the squeaky wheel gets the grease, meaning the loudest problems are the most likely to get attention. The saying rings true with debt collection. Often, the more persistent you are, the more likely you will be to receive the cash. But, this can be an uncomfortable and time-consuming process, often putting a strain on the relationship you have with your clients.
How do we get around this issue? There’s an app for that!
In the past decade, we’ve all witnessed the influence of tech companies on our traditional business processes. Technology companies are making once complex processes easier, faster and cheaper with the design of smarter software. Just take the example of Xero on traditional bookkeeping processes.
Now there are apps for online invoicing that streamline the process of collecting debt, saving you your two most valuable assets – time and money. Here are the three best online invoicing programs available to Kiwi businesses.
Chaser is a ‘do it yourself’ product. It provides an advanced platform where you can build templates for your invoices and emails, and design send schedules. Chaser’s competitive edge is the valuable insight it provides from the data collected about your customers. Within the platform, you can view a comprehensive report of your customers and their payment histories. With this information, you can view which customers are repeat offenders and consider tightening their credit terms. Chaser lets you keep control over your debt collection while providing an added level of insight into your customer base.
Debtor Daddy is a local Kiwi company that aims to remove all the friction points out of collecting debt. Simply connect your online accounting software and Debtor Daddy will handle the email reminders, phone calls and collection. The best part is, you can customise your product to suit you. If you only want Debtor Daddy to send email reminders, then that is all you pay for. If you want the whole package, including legal action, then you can customise a full-service package. It’s an incredibly flexible product that will free up your time and let you get back to what really matters – your business.
Unlike the other platforms, Invoice Sherpa includes a payment function within the invoice sent to customers. This means the customer will pay directly to Invoice Sherpa who then transfers the funds to your business bank account. The benefit lies in the simplicity for the customer. The ability to pay directly from the invoice removes friction points and increases the likelihood that the customer will pay as soon as the invoice is received.
Inevitably, more and more apps will continue to think of creative ways to increase efficiency and effectiveness, disrupting our very perception of the business tools we use. My advice is to thoroughly research the most suitable application for your business and trial and test it until you find the right one.