The Future of Instant Payments and Why More Small Businesses are Turning to Them to Improve Cash Flow
If you own a small business, you know that one of the most important things to focus on when making sure your business succeeds is control over your finances. The world around your business is unpredictable, so it is crucial that you take charge of the things you can. Many small businesses have done just that by switching to instant payments for all of their customer transactions. Instant payments can help many aspects of a company’s financial setup, but most importantly, they improve cash flow, which makes taking care of both everyday and long-term financial needs easier and more efficient. To help you understand how they could work for your small business, here are a few reasons why turning to instant payments improves cash flow—
No Settlement Periods
With traditional payments, there is often a period of settlement between when the customer makes the payment and when it is reflected on the business’s financial records. During this time, the cash from the payment is not yet available to use by the business, and this can cause issues for small businesses. With instant payments, cash is immediately transferred to the business and is readily available, keeping everything up to date.
Increased Availability of Funds
When your payments are instant and there is no clearance period, all of your business’s funds will be available without any discrepancy. With this assurance, a business is able to use its funds immediately and avoid any debt that might result from cash flow not being up to date. For small businesses, this can make a world of difference. This can help them restock when needed, make loan payments on time, even reimburse customers for returns without delay. This saves both time and money for a business, no matter the size.
More Up to Date and Accurate Statements
Not only does having funds available immediately help in the moment, but it can also help small businesses in the long term. It is very important to have up-to-date statements over time to understand your business trends, where you stand financially after each month in business, and how you can effectively allocate funds for the future of your company. With instant payments, your records will always be accurate and as up-to-date as possible, making it easier for your business to improve and grow.
More Efficient Payroll Practices
One of the best things about instant payments for small businesses is that they eliminate the need for pre-funding payroll in advance, ensuring that all employees are able to consistently receive their paychecks on time. Gone are the days of planning out how your business is going to afford payday and transferring funds beforehand. With instant payments, the funds will already be present, making your employees happy and your business productive.
Making sure your small business has optimal cash flow is one of the best ways to not only stay financially stable, but also improve and grow your business each day. While 1st Advantage Bank does not have instant payments yet,we do offer numerous business banking solutions and methods like ACH and Autobooks to help speed up your payment collections. We also provide a wealth of information for any question you may have. Our blog, the Advantage Insight, is updated monthly with brand new posts on everything from personal saving hacks to how to start your own business. Looking for more personal advice? Feel free to contact us and speak with our in-house financial experts to get individualized help with any financial concern. We are here for you, today and always. Member FDIC and Equal Housing Lender