How a Simple Invoice Tool Can Help Manage Cash-Flow In Your Business
As a business owner, you know the importance of steady cash flow. The hard reality is that only 40% of small businesses will survive past the first five years. And the number one reason for failure?
Cash flow problems.
So how can you be sure that your company will be among the 40% who survives? And what can you do to help your business not only survive…but thrive?
More and more business owners are turning to simple invoice tools to help manage their cash flow. Whether you’re a part-time freelancer or you run multiple companies, an invoicing tool can be an invaluable asset to your business.
Read on to learn more about how a simple invoice tool can benefit you and your business!
Defining cash flow
Simply put, cash flow is the movement of funds in and out of your business.
Ideally, a company will always have cash on hand to order inventory, pay employees, or care for other necessary expenses. Your business has positive cash flow when the money coming in exceeds the money being paid out.
In the real world, though, it doesn’t always work out that way.
If your sales are too low or your clients fail to pay you on time, you could easily have your cash flow disrupted. Negative cash flow occurs when you’re putting out more money than you have coming in.
Building and maintaining positive cash flow doesn’t happen by accident. Companies need to have a realistic budget and also create an accurate cash flow statement.
Understanding a cash flow statement
How do you know whether you should pay the bills that just arrived or order more inventory?
Your cash flow statement will provide the answer. When used with income statements and balance sheets, you’ll have a complete understanding of your financial status.
To make things simple, here’s a breakdown of what you’ll find on these financial documents:
- Operation costs: Also known as operating cash flow, this shows how much you’ve spent or earned on a daily basis.
- Asset investments: This could be property, equipment, machinery, furnishings, vehicles, or other tangible assets. Ideally, your company is able to pay for these assets through business-generated income.
- Financing: Cash received from (or paid to) creditors, lenders, or investors.
- Accounts receivable: The amount your customers owe you for goods and services purchased.
- Accounts payable: The amount you owe creditors for purchases and business expenses.
- Current assets: All cash, inventory, and receivables that will be used within a year.
- Depreciation expense: When an asset has stopped contributing to your income and started being an expense.
- Long-term debt: Debts that are due for a year or longer.
- Net income: Total revenue minus business costs.
- Short-term notes payable: Debt to be paid off quickly (usually within 12 months).
As you can see, there are many details to keep track of when it comes to business cash flow. This is where a simple invoice tool can help!
Benefits of using a simple invoice tool
As technology advances, it’s becoming easier and easier to manage your business. Thanks to mobile apps, it’s now possible to run a business entirely from your smartphone!
Here are just a few of the many features a simple invoice app can offer you.
What better way to impress your new customers than with a unique, professionally designed invoice?
Choose your colour scheme, upload your company logo, and sign it with your electronic signature. Some apps will even allow you to add a PayPal button or a ratings feature to encourage feedback and reviews.
These features aren’t limited to your computer, either. With the help of a simple invoice tool, you can create a PDF invoice with one click in a mobile app!
A recurrent invoice is any invoice regularly sent to a client, usually on a weekly or monthly basis. Rather than wasting time and effort creating new invoices for the same client, why not use a tool to set up recurring invoices?
Simply select a client from the list and choose the appropriate interval to invoice them. Once you click save, your work is done!
By letting the invoicing tool handle your paperwork for you, you’ll have more time to focus on growing your business.
Why spend valuable time tracking all your expenses when an invoice tool can do it for you?
Simply upload your daily or weekly expenses into the online expense manager, and let it do the math for you. You can even scan copies of receipts, which will free up clutter and make everything easier during tax season!
How has your business grown (or declined) in recent months? Where can you cut back on costs or increase your revenue?
A simple invoice tool can provide all this information and more by tracking trends and statistics for your business.
Overview of paid/unpaid invoices
Most invoice tools provide a dashboard that shows an instant preview of invoices, expenses, and available balance.
You can even enable features that alert you when an invoice has been read (and by whom).
More back accounts
Does your business operate through more than one bank account? Or are you running multiple companies through the same account?
Either way, an invoicing tool can streamline the process by consolidating all that information for you – often on the same screen!
Gone are the days when inventory tracking involved long days ticking off items on checklists.
By going digital and using a simple invoice app, technology can keep track of all your inventory for you! You can manage stock or add and subtract items with an easy click of a button.
Choosing the right invoice tool
Now that you know the benefits of using a simple invoice tool, how do you know which one to choose?
More than 50,000 businesses are saving time and money by entrusting their invoicing needs to Billdu. With applications for iPhones, iPads, Android, and desktops, we make running your business easier than ever before.
From invoices to expenditures/costs, statistics to inventory management, we invite you to learn more about Billdu and discover the many exciting features we offer!