3 ways to improve business continuity and plan your company’s future during COVID-19
COVID-19 has caused widespread disruption for UK SMEs. As parts of the economy begin to re-open following the lockdown, it’s imperative that business leaders focus on how they can gain a solid footing in this new reality, including planning to manage their cash flow the best they can at this challenging time.
Access to finance and improving efficiency are crucial for business continuity and growth as the economy and consumer confidence recovers.
We know that quicker access to funding and diversification is key in today’s challenging environment and that cashflow uncertainty hinders business growth. With a range of solutions available, companies can access on-demand, low-cost financing and lower their days sales using digital invoicing tools.
Here are 3 ways to help ensure business continuity and prepare your business for recovery:
- Evaluate your funding options
For many small and medium-sized businesses, access to working capital is critical for their growth. Business loans can come with a high cost for smaller sized businesses but there may be more affordable funding solutions available that meet your business needs. Ask if your customers are offering supply chain finance solutions and compare your loan interest rate against discounted early payment fees. Early payment solutions allow you to gain access to funding at an attractive rate and provide a simple digital tool where you can decide when you want to be paid. This is in exchange for a small discount, which aims to reflect a lower cost than borrowing from your bank.
- Improve visibility of your invoices
Consistent cashflow is crucial for maintaining a successful business. It is imperative to keep track of invoices and be aware of when you expect to receive payments. Try to leverage digital payment options offered by your customers to improve the visibility of your invoices. Digital invoice financing solutions increase payment transparency and allow you to see future payments as soon as your invoices have been approved by your customers. As a result, businesses can reduce the amount of cash maintained as a buffer against payment uncertainty. If your business is experiencing the negative effects of being paid late, the supply chain online tools also act as an automated invoice payments system. This can improve cashflow for your business and limit obstacles preventing payments from arriving on time.
- Leverage digital solutions
Digital solutions can help reduce late payments and streamline your payment collection process. Supply chain finance online platforms offer automatic, flexible payment terms to suppliers. Early payment offers are automatically generated and the online portal provides notifications when customers have approved your invoices, eliminating the need to chase late payments. You can also access digital platforms to get invoices paid earlier than your original payment due date and receive an early payment discount.
By Colin O’Flaherty (AMEX General Manager, Global Commercial Services UK)
American Express Working Capital and Supply Chain Finance Solutions helps you manage your business’ and suppliers’ cashflow, giving you efficient and flexible financing options.
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