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Achieving Cash Flow Flexibility with Automated Payments

March 30, 2023

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Payment Ecosystem

Adequate liquidity management is essential for the success of an organization. This means proactively accessing just the right cash flows to meet financial obligations.

The ability to adjust the scale of your operations in response to demand is undeniably essential. But it’s equally critical to manage your costs effectively for maintaining peak efficiency and long-term sustainability. Enter automated payments – a game-changer that empowers businesses to accomplish both objectives. By providing real-time insights into their payment flows and integrating this data into their strategic planning processes, automated payments have become a vital tool of liquidity management. A whopping 60% of companies surveyed by PYMNTS and Comdata said that automated accounting processes have resulted in a decline in missing invoices.

Fostering Customer Loyalty Through Intuitive Payment Experiences

Intuitive payment experiences are not only essential for customers, but also hold great significance for your business. This is because they build customer trust and foster loyalty through exceptional user experiences. What defines a payment as intuitive is its capacity to be executed with minimal steps, while ensuring security and offering customization options.

Intuitive payments boost customer loyalty to their preferred financial institutions, thereby enhancing cash flow flexibility for small businesses. This is achieved by simplifying business transactions through seamless automation. What’s more, when executed correctly, this approach eliminates the need for costly infrastructure upgrades or substantial changeover expenses, resulting in both enhanced flexibility and reduced operational costs.

The convenience of conducting business through Accounts Payable (AP) and Accounts Receivable (AR) automation finds its roots in digitization, a viewpoint shared by 43% of CFOs. In line with this, a PYMNTS study reveals that 70% of CFOs credit digitization with creating lifelong customer value. Here’s how:

  • Taking charge of payment schedules and staying on top of them prevents businesses from falling into debt spirals.
  • Swift payment clearance not only boosts credibility but also increases the chances of accessing attractive discounts and cashback rewards.
  • Seamless use of commercial credit cards serves as another example of intuitive AP automation.

Streamlining Cash Flow Management with Automated Payments

Visibility plays a crucial role in effective financial planning, and automated payments offer a way to achieving cash flow flexibility, while introducing the concept of “pay later.”  Zapier’s report highlights that 90% of knowledge workers find automated payments instrumental in saving substantial time and effort on routine administrative tasks. For small and medium-sized businesses (SMBs) with limited teams for monitoring inflows and outflows, automated payments provide a lifeline, especially when traditional financial institutions (FIs) fall short of meeting their needs.

Business-to-Business (B2B) transactions are gaining significant momentum, largely owing to the niche products offered by FinTech companies. Automated payments emerge as a solution to achieve enhanced visibility, enabling businesses to defer payments in the short term, with confidence in future cash availability. This newfound assurance in cash flow visibility, particularly in the face of an increasingly uncertain economy, constitutes the most significant Unique Selling Proposition (USP) of Accounts Payable (AP) automation.

The benefits of improved visibility are multifold:

  • During deferment periods, liquidity can be redirected to meet working capital needs, bolstering financial stability.
  • Automated payment schedules, aligned with contracted credit terms, ensure timely payments, thereby preventing late fees.
  • Consistently maintaining a net positive cash flow can be attributed to the enhanced visibility offered by this system.
  • Visibility, through automated payments, not only streamlines financial operations, but also fortifies businesses against the challenges of an ever-changing economic landscape.

AI-Driven Forecasts for Informed Decision-Making

AI-driven forecasts play a pivotal role in shaping smarter decisions. Unlike manual predictions, AI-based forecasts are not only faster, but also tend to be more accurate. They empower businesses to proactively plan their financial future by rapidly visualizing various cash flow scenarios, offering a comprehensive perspective for cash flow analysis.

These forecasting models draw their strength from historical data, resulting in highly accurate predictions of future income streams, expenses, and profits. They leverage trends in these areas over different time periods, essentially conducting a historical analysis. This capability proves particularly advantageous for businesses with Variable Revenue Patterns (VRPs), as AI can be finetuned to identify trends over specific periods based on logical assumptions.

Some of the benefits of automation-integrated invoicing software are:

  • With this software, generating AI forecasts becomes a seamless routine task. There’s no need for manual data input, allowing businesses to effortlessly harness AI’s predictive power.
  • These are helpful in identifying the causes of AR (Accounts Receivable) discrepancies. The sooner you know your DSO (Days Sales Outstanding), the faster you can act.
  • Human-AI alliance also indirectly benefits suppliers through Invoice Factoring agencies that use it for document approval processing.

Embarking on the High-Growth Journey with Strategic Planning

While larger companies can focus on stability, small and medium sized businesses (SMBs) need to embrace high-growth trajectories to survive the many challenges presented by diverse and rapidly changing customer needs, intensifying competition, inventory management, supply chain bottlenecks, and compliance.

So, how does one go about selecting the most suitable high-growth path? The decision involves various parameters, like offering new products and entering new markets. This, however, comes with efficiency issues that need to be addressed for achieving scalability. Central to this pursuit is the development of a reliable strategy aimed at maintaining consistently positive cash flows.

Achieving success on a high-growth path is contingent on the ability to sustain that growth over time. This necessitates the implementation of modern processes that not only support growth, but also guarantee stability.

One effective approach involves integrating both Accounts Payable (AP) and Accounts Receivable (AR) automation into a unified interface. This integration enables the generation of comprehensive financial reports encompassing all facets of the business across departments. By breaking down silos and fostering seamless coordination, this strategy steers high-performance businesses away from stagnation.

Optimizing Cash Flow with Opus: Your Partner for Success

While Cash flow flexibility is critical to business success, it is highly complex to achieve. The adoption of automated payments emerges as a potent solution, shielding businesses from the pitfalls of manual processes. In doing so, it streamlines tasks such as invoice processing and accounts receivable (AR) management, effectively reducing the time and effort required. The resultant ease of operation not only benefits internal teams, but also extends to customers, who enjoy swifter payment processing and more accurate estimations of when your organization will pay them.

History stands witness businesses with brilliant ideas failing due to inefficiencies in monetizing their products or services. The solution does not lie in across-the-board price hikes, but rather in the effective management of cash inflows and the prudent control of cash outflows. This underscores the need for a well-planned business model for profitability and a predictable growth trajectory.

If your business can benefit from prudent cash flow planning,  contact Opus for assistance in implementing automated payments. Together, we can pave the way for your business’s financial success, providing you with the tools and strategies needed to thrive in today’s competitive landscape. Don’t let cash flow complexities hinder your growth. Partner with Opus to optimize your financial operations and achieve lasting success.

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