Last year, faced with rising inflation and payroll expenditures, 57% of small businesses slashed costs. But how did they decide what to cut — and how deep?

Without real-time insight into cash flow, too many businesses make critical decisions based on guesswork.

Sustainable growth requires rigorous cash management. But for many growing businesses, that’s easier said than done: Manual payment processes make it hard to gain clear and current visibility into available funds.

The solution is automation. For example, digitizing accounts payable (AP) and accounts receivable (AR) workflows eliminates time-consuming, error-prone manual processes while instantly reconciling transactions with accounting software. With payment automation, you’ll gain control over your cash through an up-to-date view of every dollar coming in and going out.

Plus, digital cash management not only empowers accountants, bookkeepers, and business owners. It makes their work more efficient and rewarding.

Here are five other benefits of streamlining cash management:

1. Answer when opportunity knocks
2. Strip wasted time and money from operations
3. Grow, reward, and retain your team
4. Expand your offerings
5. Budget and forecast with precision
   

Answer when opportunity knocks

With a clear line of sight into your cash flow, you’ll make better business decisions faster. And with growing businesses, opportunities present themselves in many forms, often when you least expect them:

• New markets: Are your products or services beginning to gain traction beyond your base?
• New segments: Is your business attracting customers that look different than your regulars?
• Competitors: Did your competition misstep, sending their customers to your doorstep?
• Current customers: Do loyal customers refer more like them?
• Partnerships: Have you connected with other businesses with offerings that complement yours?
• Marketing: Did your most recent ad campaign perform better than you expected?

When you’re in control of your cash, you can answer whenever opportunity knocks. You won’t need to worry about which invoices are unpaid or the impact of unplanned repairs — you’ll know.

Strip wasted time and money from operations

Streamlining operations saves time and money. But you can’t effectively optimize workflows and spending if you’re not in control of your cash. Here’s what you should monitor regularly to make data-backed decisions:

• Expenses: Are you spending more or less than expected on rent, utilities, insurance, supplies, and everyday maintenance?
• Payroll: Did you lose or gain employees?
• Expenditures: Were there any surprise investments in machinery or equipment?
• Taxes: How did the latest laws affect your business?
• Technology and software: Was efficiency or performance improved by new tools?
• Professional services: Did you seek outside help from lawyers, marketers, or other consultants?
• Emergency fund: If you set cash aside for emergencies, what’s left?

Use your answers to these key questions to see where you can afford to spend more and where you should cut back. Optimizing operations boosts your team’s performance, transforming a knee-jerk organization into a well-oiled machine.

Grow, reward, and retain your team

Your employees are your most valuable assets. When times are good, effective cash management enables you to explore new ways to grow, retain, and reward them. When times are lean, it helps you make cuts with precision, minimizing cultural impact.

• Staffing: Confidently expand your team to support projected growth.
• Downsizing: Make bare-minimum cuts to employees or benefits.
• Bonuses: Recognize and reward top performers.
• Promotions: Advance deserving employees.
• Perks: Differentiate your culture by adding new benefits.
• Training: Foster development through educational programs.

Despite fears of putting people out of work, digitizing finance workflows helps you prepare to meet changing market conditions.

Expand your offerings

Automation gives two gifts: First, time back from once-manual processes. And second, insight into what you can afford to spend to grow your business. Take advantage of both to evaluate new products and services:

• Research and development: Fund fact-finding before you go to market.
• Product improvements: Are there enhancements or customer suggestions that might boost sales?
• Diversification: Explore new offerings for new audiences.
• Digital offerings: Can you offer virtual services or digital products?

Remember, you may need to save some of your budget to hire new employees or specialists to help you get your new product or service off the ground.

Budget and forecast with precision

Planning, budgeting, and forecasting can feel like gambling with your business’s future. Harnessing the power of technology to stay on top of your cash flow equips you to make safer bets.

• Increased accuracy: Manual data is subject to human errors that distort forecasts and budgets.
• Predictive analytics: Predict future cash flow by analyzing current and historical data.
• Real-time data: Make timely, informed decisions that are easy to adjust as financial conditions change.

When you have an accurate picture of your business’s finances today, you have greater confidence in your plans, budgets, and forecasts for the future.

To control your cash, automate your payments

Payment workflow automation that includes accounts payable and accounts receivable is the secret to easily taking control of your cash flow. It delivers the confidence and clarity you need to consider your options carefully and the freedom to act fast as business-building opportunities arise.

With Plooto, you can try all-in-one AP and AR automation for 30 days. Sign up and say goodbye to manual payment processes.