Struggling with finances? These payment solutions will save you

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When you're building a startup, every minute and dollar counts, so finding ways to improve is essential. One area where you can have a big impact is payment processes. Surprisingly, about a third of small businesses still handle ad hoc payments manually, even though these make up a large portion of their revenue. Outdated systems like these can lead to inefficiencies that hold you back, but adopting innovative payment strategies can keep operations and cash flow lean sustainable – giving you the fuel to grow.

By optimizing payment processes, your startup can save between 60% and 80% on payment processing costs. This can increase your cash flow and free up funds for other critical areas, such as product development and marketing.

Automate your accounts payable process

Think about the time you spent sorting through invoices, tracking approvals and scheduling payments by hand. Automating this process can save time by keeping everything on track with no missed deadlines.

Manual payments can lead to errors, delays and missed payments, which in turn can strain the relationship with the seller. By automating AP, you can streamline your payments workflow. Businesses can save up to 80% on processing costs through AP automation, which also cuts invoice processing time by over 70%. For a startup, that's not just time saved—it's time invested back into growing your business.

Some platforms offer AP automation tools that allow you to approve and schedule paymentstrack invoices and get real-time updates. Automation will not only reduce human error, but also provide a single source of truth for all accounts payable data.

Use real-time payments to keep your cash flow moving

There's nothing quite as satisfying as getting paid immediately after completing a job or delivering a product. Real-time payments make this possible, letting your startup move money at the speed of your work. Gone are the days of waiting three to five business days for an ACH transfer; now, your funds can be available in seconds. This is especially useful when every day counts, like during a growth phase.

As of 2023, 85% of the US businesses plan to adopt real-time payments within the next year, and nearly 99% of large corporations (with revenues from $1 billion to $9.9 billion) expect to use real-time payments within the next five years. With platforms like FedNow service® and the RTP® network, real time payments are becoming a reality, helping businesses maintain stable cash flow and reinvest in growth faster.

Optimize payment methods for your customers

One of the easiest ways to speed up your cash flow is to make it easy for your customers to pay you. Offering multiple payment options—like instant payments, credit cards, same-day ACH transfers, and digital wallets—removes friction from the payment process, meaning faster payments and happier customers.

Imagine your customer wants to pay via instant payments, but you only accept credit cards. They may delay payment or even rethink the purchase altogether. Giving customers choices ensures payments come through faster and with fewer barriers. Look for platforms that allow integration with multiple payment methods. Many of these platforms can be customized to fit your payment schedules, giving customers the flexibility they need to pay quickly.

Implement cash flow forecasting tools

Cash flow forecasting is essential when planning for growth. By accurately projecting your cash inflows and outflows, you can make informed decisions about spending, employment, and investing. 82% of businesses fail due to cash flow mismanagement, making cash flow forecasting a critical tool for any scaling startup.

Let's say yours cash flow forecasting indicates a shortage in the next quarter. Instead of being caught off guard, you can prepare by either cutting unnecessary expenses or finding short-term financing options.

Use platforms that offer built-in forecasting tools. These tools use historical data to help you make accurate forecasts, enabling you to plan ahead and make proactive financial decisions that keep your business on track.

Take advantage of early payment discounts and negotiate with sellers

Cost savings can be just as impactful as generating new revenue, and one way to do this is by using early payment discounts. Many vendors offer discounts if you pay your bills within a certain time frame, usually 2-3% off if you pay within 10 days. For a cash-strapped startup, these savings add up quickly. Also, establishing solid relationships with vendors through consistency and early payments can lead to better terms and loyalty.

For example, a vendor offers a 2% discount on a $5,000 bill if you pay within 10 days. By using this option, you will save $100. Apply that to multiple vendors and invoices, and you're looking at significant annual savings.

It's worth having a quick chat with your vendors to see if they offer early payment discount or if they are open to terms that match your cash flow needs. Showing your commitment to prompt payments can open the door to future benefits, whether it's additional discounts or more flexible payment terms when you need them.

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