When first setting up your business, whether it’s a grocery store or an animal hair salon, you’ll soon find out there is more to it than just providing customers with the fantastic service you have in mind.
Even if you have a team to assist you, as a small business owner, you’ll likely find yourself wearing numerous hats – often acting as a sales representative, customer service provider, and, perhaps, the most dreaded of all, accountant.
No one likes to pay their bills, and businesses tend to have a lot of them. Manually handling each of them might seem like the right way to go at first, as it doesn’t require you to reinvent the wheel.
After all, who hasn’t written their fair share of paper checks or sent a transfer through their bank’s online platform?
However, as your business grows, you will find this seemingly menial task can become a serious hassle, which takes up a significant portion of your time, is difficult to track, and is prone to mistakes.
The good news is that there are digital payment management tools (like Melio!) out there that can help your business run more smoothly, save money, and maintain good relationships with vendors and partners.
Making the right decisions early on in your business’s life leads to better habits in the long run, and that’s why it’s so important for you to consider shifting to digital payments right away.
7 Reasons to Digitize Your Business Payments
Below are 7 benefits that come from digitizing your business payments from the get-go.
1. More time-efficient
When your business is taking its first steps, you may not realize how overwhelming manual bookkeeping will become as it grows.
Each vendor typically has their own accepted payment method, which means you must alternate between making transfers on your bank’s website, picking up the phone or using a vendor’s dedicated platform to pay via credit card, and manually writing and mailing out paper checks.
This process takes up a lot of valuable time you could have used to develop your business further (or spent with your loved ones – just as important!).
With digital payment solutions, you save time by eliminating human error in calculations, automating recurring payments (such as rent and utilities), and scheduling all your transactions to go out exactly when they need to.
And, you can do all of this in one session on a single platform, regardless of the desired payment or delivery method.
You’ll also never have to look up the account details again. Once you pay a vendor once, their info is already recorded and ready for your next payment in just a click.
2. Better cash flow
For many businesses, especially small ones, managing cash flow correctly could be the difference between thriving and plummeting.
Maintaining the right balance is key here. You need to avoid paying too early, thus depleting your cash flow. But, you also cannot afford to pay too late, which can result in fines, penalties, and sometimes even irreparable damage to your relationship with vendors.
Trying to maintain this balance when manually sending out each payment can be difficult and inefficient. Using a digital payment tool, you can get an overview of all of your due bills and schedule them in one sitting, to arrive at just the right time for both you and your vendor.
Moreover, some digital payment solutions let you pay with a credit card, even if your vendor only accepts checks or bank transfers. This allows you to defer payments and extend float until your next billing cycle, which can make a huge difference if you’re still waiting for that check from your own customer to clear.
3. More control and better organization
No more looking for stray check stubs or paper bills you might have misplaced. Managing all of your payments on a single digital platform provides you with a complete overview of your business’s finances, even taking into account scheduled payments and bills due at a later time.
With digital payment tools, you can also know for sure if and when your funds have arrived without needing to reach out to your vendors.
This way, you know exactly where you stand at any given moment, even when you are away from the office; all you need is a laptop or a smartphone and you’re all set.
Nothing is worse than having an uncompleted task on your mind – like knowing you have a due bill in three and a half weeks.
You might get the urge to take care of it right away, along with other bills that are due this week, but then you risk hurting your cash flow. Putting it off to the last minute would also be ill-advised, because missing a payment has its own ramifications.
The right digital payment tool can help solve this dilemma for you, by allowing you to handle all your bills at once, scheduling payments as needed to make sure the funds leave your account no sooner than they have to and arrive on time, every time.
Shifting your payments to a digital tool has the added convenience of managing your finances from anywhere, even when you are on the go.
You can pay from any device during your daily commute (as long as you’re not the one driving), waiting in line at the post office, or even while you’re having your morning coffee.
With digital AP (Accounts Payable) tools, you have a record of all your paid bills and scheduled payments so that you can get a clear picture of your business’s finances at any given time. This is especially handy come tax season, when you have to prepare your annual report.
6. Security and safety
Digital payments are far safer than many other payment methods. They don’t get lost in the mail or stolen, and there’s also a clear record of when they were sent and how. Additionally, online payment systems also have layers of security protocols and encryptions that make sure the funds arrive safely in the hands of your vendor and no one else.
Another important aspect of safety in this day and age is minimizing unnecessary physical contact to help curb the spread of Covid-19. As it is no longer recommended to have vendors drop by your office to pick up checks, online payment tools offer an easy, hands-free alternative that keeps the wheels of business turning while maintaining public health regulations.
Why not go green if it’s easy? Think about all those paper bills you will no longer need to receive, print, or send out.
Consider the gas burnt in the process of transporting physical checks or even the carbon footprint of the envelopes in which they arrive. It’s not hard to see how much greener your business can be if you go digital.
Ready to join small businesses across the country who are already managing their payments online the smart, secure, and eco-friendly way? Start now with Melio. It’s simple, fast, and free!
Melio is on a mission to keep small businesses in business by providing a smart B2B payment solution tailor-made for their needs. Melio’s digital accounts payable and receivable dashboard provides a single, integrated tool that allows small businesses to transfer and receive payments in a faster, easier way, giving oversight and control over cash flow, eliminating late payment costs, and giving businesses back valuable time.