To survive and thrive, companies need to have a strong grasp of their cash flow. By understanding when, where and how money enters and exits a business, companies can more effectively manage spend, reduce error and plan for the future.
This is especially true for small businesses, which often run lean with limited cash reserves. So closely managing spend in real-time can be crucial to a company’s survival. And as businesses grow, accounts payable (AP) processes only become more complex. For example, Concur data found that small businesses with less than 50 employees process an average of 217 invoices per month. It increased to 403 invoices per month at businesses with 51-500 employees and 1,369 invoices per month at businesses with 501-1,000 employees.*
During National Small Business Week, we not only celebrate the accomplishments and contributions of small businesses everywhere, but also encourage conversations about fueling their long-term success. Here are a few tips to help small businesses get a handle on effective AP management and plan for the future.
To have a good handle on your finances, you need to know what’s coming in and what’s going out in real time. Tracking it all will help you head off mistakes and oversights. For example, Concur recently found that small businesses receive an average of six duplicate invoices totaling more than $12,000 each month. If you’re not tracking these closely, it would be easy to make duplicate payments. Could your organization survive that for long? A real-time view into cash flow can help you cut costs, manage spend more efficiently and get ahead in the future.
Pull your data together
Knowledge is power, but only if you can understand it. Data equips small businesses to make smart investments, cut costs and keep things running smoothly. However, if expense and AP data is spread across multiple sources and locations (Excel spreadsheets, handwritten files, online tools, etc.), the chances for outdated information and errors increase. By consolidating financial data in one location, you are more likely to have accurate and actionable insights.
Automate AP processes
A modern, cloud-based AP tool can help small businesses manage their finances more seamlessly. Solutions like Concur Invoice automate the entire AP process, from invoice receipt and processing to payment management and settlement. By employing Concur Invoice and Expense, Seattle-based soccer specialty store Schmetzer’s Sporthaus “drastically reduced AP processing time, eliminated duplicate invoices and lost receipts, kept our back office lean and improved our cash flow visibility.” When choosing a tool, consider how easily it can be used and managed. Intuitive, easy-to-use solutions with mobile capabilities will save you headaches and resources.
Evaluate spend over time
By evaluating spend year over year, you can spot trends that impact the bottom line. For example, are certain vendor costs going up, staying the same or dropping? Is it time to renegotiate contracts or explore other services? This process can help uncover insights and save you money over time. Tools that give you a real-time view of cash flow and help you track and improve your performance over the long haul can help drive your growth now and in the future.
Click here to learn how small to medium businesses can save time and money by automating their spend management with Concur.
*Data based on small businesses with less than 1,000 employees using Concur Invoice during April 2016-March 2017