Advantages of Using an Integrated Invoicing and Payment Gateway Solution

Today, the majority of business is done online as digital payments continue to observe an exponential growth. In fact, without such services, doing business in global markets would be nothing less than a nightmare.

Truth is, apart from using invoice software there is still a lot more you can do to improve your finance management today. Embracing an integrated invoicing and payment gateway solution, for instance, can give your business a leverage over others in today’s competitive market.

Think about it- why send the invoices to your customers through emails which they have to first cross-check and then clear by approaching their bank or a third-party payment service provider?

It’s not hard to understand that it’s not the best way to do the job. So, what if you could send invoices along with the payment option right next to it?

The following are some of the biggest advantages of deploying a combined invoicing and payment gateway product:

  1. Lower Transactions Fees

While there is no dearth of banks and other third parties that offer payment gateway services for you to send and receive the payments, you do have to pay a fee for the service which includes third-party processing fees, additional transaction fees, etc.

Since you could be doing multiple transactions every month, even small fees when multiplied several times can amount to a lot. When it comes to business, cutting recurring costs by even a small percentage can often be a game changer. You should consider a payment solution that offers lower transaction fees, maintains security levels and gives you access to a wide range of currencies which can be accepted.

  1. Faster Funds Transfers

To reduce the time in funds transfer, you should consider two things:

  1. Process of sharing invoices and payment details
  2. Time taken by the payment platform to transfer funds in your bank

With an integrated invoicing and payment platform, instead of waiting for up to a week, you can receive your funds in just 48hrs. As it helps you share invoices through email with integrated payment option which helps your customers pay immediately and also the payment platform transfers the funds to your bank in as low as 48hrs.

  1. Multi-Currency Invoicing and Invoice Management

Multi-currency invoicing allows you to create invoices in a variety of currencies quickly and easily.

Combined with quality invoice management tools such as payment status tracking and reminders you can keep an eye on the cash inflow and outflow with just a few clicks on your device. Similarly, with an easy collaboration feature anyone can check the invoices and make changes as required without having to deal with a lot of “to and from”.

  1. Simplicity in Business and Tax Management

Why make your accounts, transactions, invoices a mess by using a variety of software programs for different purposes when you can combine them all into one cohesive unit that’s not only much more efficient but also simple to manage?

With a payment-invoice program you can:

  • Create and send invoices easily and quickly
  • Save time in reconciliation with bank statements
  • Ensure all invoices are in the same place (no invoice misplacements)
  • Simplify taxes/bookkeeping
  1. A Professional Touch

Freelancers and SMEs often face neck to neck competition in their space. This is the reason why even small things can give you an edge and help take your business to the next level fast. A payment-invoice program is a great example of this.

Using a new-age invoice-payment solution you can show your customers that you like to keep pace with the changing times and care for their convenience with a service that offers:

  • Easy payments
  • Multiple payment options
  • Transparency in taxes, currency exchange rates, transaction fees, etc.

With an invoicing platform you can also do branding easily by printing your company name and logo on the invoices.

  1. Easy Reconciliation

Invoice management can often be a herculean task, unless you have the right tools. For instance, you can’t take any risk when it comes to reconciliation as even a single discrepancy in one account can make the numbers on the other accounts go all haywire. However, integrating your payment gateway and the invoicing module can help to keep the transactions and accounts organized.

  1. Easy Access, Better Control

With cloud-based services, you can keep an eye on the payables and receivables when you are at the office, at home, or even when traveling. Going through payment reports you can also easily identify your biggest clients and other potential clients that just need to be nudged in the right direction.

Bottom Line

With a program that can combine invoice management and payment gateway services you have all to gain and nothing to lose. So, it’s not a question of “why” but “when”.

Is Your Business Scalable? Here’s What You Can Do

Scalability is one of the most important aspects of every business. No matter which industry you are from- telecom or finance, software development or manufacturing, your business must be bbuilt-in a way that with time, you can expand it easily at minimum costs.

If scalability is a bit of a gray area for your business, then this write-up can serve as a basic guide for getting started.

Is your Business Scalable?

One thing you need to get out of your way first is, well, finding whether your business is even scalable or not. Most businesses that are based on the owner’s skill set or talent are not really scalable. This is because such businesses are limited by just one person’s abilities.

A scalable business is the one which is able to keep the costs low while increasing the revenue gradually. In fact, the less is the involvement of the owner, the better it’s for scalability.

A good example of a scalable business is a software firm. This is because while the initial investment for developing software products may be high, once that’s being taken care of, the business can simply make copies at a very small cost. Similarly, e-commerce, or rather any kind of business that’s selling products online is highly scalable. This is because revenue can be increased by promoting the business through blogs, webinars, and other popular forms of digital marketing tactics.

Making your Business Scalable

Now that you know what makes a business scalable, you can change your business model accordingly. The following are some of the key features of a scalable business:

  1. Optimum Cashflow

Cash flow problems are one of the leading causes behind business going defunct. So, if you want to scale, you must ensure a good cash flow. The following are a few tips that can come in handy in that enterprise:

  • Make it easier for your customers to clear invoices by offering as many payment methods possible. Apart from the standard debit card and credit card options, you can also offer them to pay through digital wallets.
  • Levy a penalty for late payments if you aren’t already and let your customers know about it. A good way to do this is to mention it in the invoices. When your clients will learn about the penalty, they will be more likely to pay on time.
  • Don’t merge your personal expenses with business expenses. That’s the key to good cash flow management.
  1. Partnerships

Why would a successful business want to partner with another business? What’s the need? Well, believe it or not- partnerships in the realm of business are extremely important, even for the biggest players. For instance, Nike and Apple are considered as some of the most powerful companies in the world. Then why did they join hands in 2006? They were already successful. What were they looking for? Well, the answer is Scalability.

By working separately, the dominance of Apple and Nike was limited to some areas. However, by inking a pact they were able to venture into different realms and scale their businesses. The Nike+iPod Sports Kits, Apple Watch Nike+, are some of the excellent examples that support this point.

  1. Automation

Automation is the future of businesses. There are all kinds of software available through either a SaaS or license model that you can use for automating various tasks such as invoice and expenses management, attendance management, lead generation, and what not.

There are several advantages of automation:

  • Saves time- Employees can focus on important tasks that are more suited for a human intelligence
  • Saves Money- The more business operations you will automate, the less number of employees you will need which translates to fewer salaries
  • Scaling on the Go- Automation can make scaling super easy and fast. By establishing a system that can automate the majority of the workflow, you can easily hire new employees and train them in minimum time or add and sell new products without affecting the efficiency of your business operations.

If you want your business to be scalable, you must think two steps ahead. You need to make today’s decisions based on your future projections. If only that is being taken care of, all the pieces will eventually fall into place.

How to Reinvest Your Small Business Profits in a Smart Way?

There are two types of entrepreneurs- those who use their profits for personal use and those who reinvest the same into their businesses. Guess which of these eventually become powerful tycoons?

Smart entrepreneurs understand that a business is always hungry for money. So, if you want it to grow, you have to feed it frequently. Otherwise, working on thin margins and keeping reinvestments to the minimum can easily be a recipe for disaster.

While reinvesting your business profits is important, even more important is how you go about it. On that note, the following are some of the smartest ways of directing the revenue back into the business:

  1. Debt Clearance

If you have taken a business loan or have a debt of any kind then that should be your priority. The logic is simple- the longer you take for full repayment, the more money you will have to pay in the form of interest. So, by paying your debt sooner you can save that money and use it for growing your business instead.

  1. New Equipment for Faster/High-Quality Production

Many businesses start with a modest investment, which is why they have to compromise with used or less efficient machinery or equipment. However, to keep pace with your competition you must upgrade your equipment with time. This is especially important if you want to improve the rate of production.

So, for instance, if you are manufacturing a certain product then you can invest in newer machinery that is more efficient. In doing so, if you are able to automate some of the processes through the new equipment, then you can save the money on the salaries that you would otherwise need to pay to the workers responsible for those tasks.

  1. Marketing

Every successful businessman worth their salt know that the adage “let your work do the talking” is nothing but bogus. We live in a competitive world today where it’s nearly impossible to survive without blowing your own trumpet. Thus, quality marketing can go a long way.

You can reinvest your revenue into different kinds of marketing models- social media, blogs, YouTube, etc. You can even invest in an analytics system that will help you get a closer look at how well your business is doing on the Internet.

  1. SaaS Services

The majority of fast-growing businesses have adopted SaaS (Software as a Service). By following the same you can enjoy the benefits of enterprise quality software while paying only a portion of what the multi-billion dollar corporations pay. Moreover, you can get dedicated customer support, easy upgrading and scaling options, and automatable operations.

  1. Business Expansion

You can only so far with a limited line of products or services. If your business has been operational for a few years now, then maybe you can finally take the next big step and add more products to your catalog.

Now, there are two ways to do this: you can either get your in-house team to work on the new project, or you can simply acquire another company that’s already working in that sphere. So, for instance, if your business is only offering web based app solutions, you can acquire a decent mobile app development company and expand your business easily.

In a business, every single financial decision and every penny count. So, you must be really careful with what you do with the generated revenue. That being said, the options given above can definitely nudge you in the right direction.

Questions to Ask Before Taking a Small Business Loan

Businesses are built on capital. You need Funds for hiring employees, purchasing machinery and equipment, marketing, sales, and what not. This is the reason why so many entrepreneurs and even seasoned businessmen take small business loans from time to time to fulfill their financial requirements.

If you are planning to take one, be sure to ask yourself the following questions first:

  1. Do I Really Need This?

It is such an ordinary question, yet it is probably the most important of all. Debt is not always bad. However, the thing to remember here is timing and requirement.

What do you need the loan for? What’s the purpose? If you have tonnes of purchase orders that you can’t meet with your current revenue, then getting a loan will be a good idea. This is because it will help you increase the profits and expand your business. However, if you want a loan to get a better office space, or for buying equipment for future business expansion, then maybe you should reconsider.

  1. What’s my Credit Score?

Gone are the days when business loans could be availed on the basis of goodwill alone. These days lenders take all kinds of measures to minimize the risks. One of these is the credit history of the applicant.

No matter which bank or NBFC you will apply for the loan at, they are going to check your credit history. If it looks good, you will get the loan. However, if it’s not, then the odds are low. Best case scenario- you will get a loan at a high rate of interest. However, it can actually do more harm than good.

It’s highly recommended that you check your credit report before applying for a loan. If your score is below average and if you are not in a hurry, you can work on it first and make improvements. Once you have accomplished that you can get a loan easily and at an attractive interest rate too.

  1. How Much Money Do I Need?

There is a popular misconception floating around that a lot of money can solve all your problems, including the business problems. However, that is not really true. This is because the money you get in the form of a loan comes with several conditions. For starters, there is a high rate of interest linked to it which can make a big difference. Also, more money also means a longer term.

Ideally, you must get a loan that’s enough to increase your return on investments (ROI). If the loan is actually going to reduce your ROI then you should reconsider the entire idea itself. Also consider the fact that you will be paying EMIs every month which will be, of course, deducted from the cash flow. Plus, you need money for staff salaries, utilities, rent, inventories, and what not. The bigger is the loan amount, the bigger will be EMIs. So, be sure to see that you have enough left after dealing with all these expenses.

  1. How Long Would It Take me to Repay?

The term of the loan is something you must consider carefully. As long as you are in debt, you would need to take out a portion of the revenue every month. So, choose a term with regard to your business projections. Do you think you will be able to sustain your current cash flow after the loan, or would you need more time so as to prevent financial stress? These are some of the things to think about before making any decision.

  1. What are the Prepayment Charges?

Say, you obtained a loan for a term of 5 years. However, your business did well beyond your expectations, and in 4 years you have enough money to repay your entire debt. So, you go for it, only to find out that you have to pay a hefty fine in the form of prepayment charges.

Save for a few exceptions, banks usually charge you for repaying your loan prior to the actual completion of the term. It is best if you can find a lender that doesn’t have any such condition.

Business loans are often the best option for raising capital for your business. However, there are other options too, such as invoice financing, equity sale, etc. which you can also consider.

Overcoming the Financial Challenges of a Growing Business

A business expansion comes with its share of risks and responsibilities. It is no surprise that so many entrepreneurs dread the same despite the significance. However, the truth is that by preparing yourself in advance you can plan better and overcome the challenges easily.

The following are the top financial challenges that are set up against when expanding your business:

  1. Slow Cash Flow

In an ideal world, your business cash flow would keep pace with the growth. However, that’s seldom the case in reality.

When growing your business, you need to make sure that enough revenue is generated periodically so that your increased expenses can be dealt with easily. If you have any debt, then you must take that into consideration as well.

Many times, cash flow is not as speedy as you want it to be. So, you can enact some policies that can minimise the risks. For instance, you can create a “one-week-maximum” invoice clearance policy, as per which the clients making the payments after one-week grace period will have to pay an additional fine. Similarly, you can notify your vendors to supply the products/services on time to keep everything in sync.

  1. Funding

While optimizing cash flow is important to prevent potential obstacles that can hinder business growth, you also need more money for new equipment, marketing and sales instruments, extra staff, and more. For this, going the traditional way such as angel investors could be a good idea. However, you can benefit even more from alternatives such as:

  • Crowdfunding Campaigns: This can work out excellently if you are planning to launch a new and innovative product(s) that the people are likely to be excited about.
  • Invoice Financing: Invoice Financing has been around for decades and is a good option if your business is already doing great.
  • Peer to Peer Lending: You can get better interest rates at better terms for a business loan from a P2P firm in comparison to a traditional bank.
  1. Finance Management

Managing money in a business is difficult itself. However, when the business expands, then additional moving parts emerge on the surface and the structure becomes complicated. So, a smart thing to do at this point is to get a CFO onboard.

You need a finance expert to handle all the money if you want a smooth ride ahead. However, if that’s too “expensive” for the business at this point, you can hire a good accountant or someone from with similar skill set. At the very least you should have an enterprise-level accounting, finances, and expenses management software program to make money management easier and simpler.

  1. Staff Costs

As your business grows, you need more workforce, more staff. However, it can be difficult to pay all the employees full salaries without affecting the cash flow. So, you can take a smart approach towards it such as:

  • Outsourcing: More and more people are working remotely these days as crowdsourcing is becoming a popular trend in the recruitment industry. You can find all kinds of talents-accountants, programmers, designers, personal assistants, at what not, with different remuneration requirements and expertise. Moreover, it’s easier to find a decently skilled employee at a much lower rate on a contract basis.
  • Fresh Recruits: If experience is not really important to you, then you can also consider hiring fresh college graduates. The plus-side of this is that you don’t have to pay them full salaries. In fact, you can have them work for free in exchange for some quality experience.

Finance is at the core of every business. So, be sure to know your numbers at all times. There will always be problems- even more when your business is growing since they are a part of the journey. However, if you know your numbers and think clearly, you can overcome any kind of financial obstacle and move ahead.

Biggest Myths of Invoice Financing

4 Biggest Myths of Invoice Financing

Invoice financing has been around for a long time. Also called invoice discounting or factoring, invoice financing works on a simple principle but has its advantages nonetheless. During times of a cash crunch or to meet urgent investment requirements, it can often be the best possible option.

What’s Invoice Financing?

Invoice financing, as the name suggests, is financing on the basis of pending invoices. So, if a company has Rs. 10 lakhs worth of unpaid invoices then it can use them to receive a portion of that amount from a provider.

These invoices can be utilised as security by the lender, and they can disburse 70% or 80%, etc. of the total unpaid amount to the company. When the concerned customers pay off these invoices, the company can repay the amount to the lender.

Usually, the company has to pay a certain fee for this service which could either be a flat amount or a varying amount based on an interest rate.

Invoice financing is a good funding option. However, it has its share of misconceptions. On that note, the following are four biggest myths of invoice financing:

Myth #1: It’s Expensive

Invoice financing can be expensive- that’s true. However, in most cases, it is actually quite affordable. Since the lender gets security in the form of unpaid invoices, which are accounts receivable, the risk they have to take is not that high. If a company fails to repay the debt, then they can simply use the invoices as collateral.

Most invoice financiers charge a small fee for the service, especially if the company is linked to a long-term contract. So, in the big picture, the cost of service is relatively lower than other options such as loans.

Myth #2: It can Leave a Bad Impression on Customers/Clients

Invoice financing may be availed on a disclosed or undisclosed basis. In the latter, the invoice payments are made to the actual company, and the customers don’t get to know about the involvement of a third party. However, in the former, the customers know about the third-party and they have to make payments to a different account that belongs to the lender.  So, by choosing the first option you can prevent your customers from finding about the arrangement.

Myth #3: Invoice Financing is for Struggling Businesses

Invoice financing is often put in bad light. However, the truth is that not only it has numerous advantages it’s becoming one of the most popular forms of funding today.

Invoice financing allows you to meet your short-term liquidity requirements at a small price. So, you can pay the salaries of your staff, buy new equipment, or even plug the leaks in the cash flow with the quick funding.

Myth #4: Your Business is Locked in a Long-Term Contract

A financial institution, especially an NBFC, would want a client with long-term financing needs for sustained revenue. This is the reason why many invoice discounting service providers ask their customers to sign a 6-month or 12-month term contract. However, some lenders are more flexible and offer short term contracts up to a month or two as well.

Despite all the delusions regarding Invoice Financing, it still holds up to be one of the easiest and simplest funding option a business can go for. The key is to find a provider that offers lower fees and high flexibility

Integration That We Provide, To Make Your Life Easier

Integrations That We Provide, To Make Your Life Easier

Managing money, accounts, finance and other monetary issues for your venture is crucial and needs to be given ample importance. As the size of the company increases, accounting entangles and hence, you might find yourself distracted. If that has ever happened to you, this article is specifically for you!

Online vs. Offline Cash Flow Management

When it comes to comparing offline and online cash flow management, managing online is always easier and a go-to option. When something can be done in 2 minutes, why invest 2 hours in doing the same?

Online accounting and invoice creation is not only a cakewalk to create but also takes a jiffy to look back.

numberz, always at your service

We at Numberz, not only have created a trouble-proof way of managing your accounts, invoices, and expenses but also provide various other features to make your life easier. Hence, we have integrations as a path to smooth accounting.

The integrations, and how to use them!

 

  1. Excel at your fingertips!excel invoice

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Creating invoices in bulk is a tedious task, but is supposed to happen every month.

So, what do you do when you need to create bulk invoices?

Fill each one manually? Or scratch your head to find certain better ways of managing invoices?

Let’s save up some time for you. Creating excel sheets are easier as you can copy paste easily. Right? You can use that for creating invoices in Numberz as well. Just create an excel sheet and upload into your debtor list here. You can reach this page by going to the invoice section and selecting ‘Import invoices’ from the dropdown at the top right corner (near ‘add invoice’ button).

Not only can you import invoices through excel, you can do same for expenses. Just navigate to expenses, from your dashboard and click on ‘Import Bills’. In case of any confusion, there is always a ‘guide me’ section to help you.

 

  1. The Tally Integrationinvoices on tally

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We understand that almost every accountant is in love with Tally and when you’re onboard for using numberz, you don’t need to hassle enough to get into your next favorite platform. Follow the given simple steps to integrate numberz and Tally smoothly.

Note: You’d need three things for this integration.

  1. Chrome plugin that you can find here
  2. Registration on numberz
  3. Tally on your system

For using Tally integration and for syncing all the invoices and debit notes to Tally, follow the steps as given here.

  1. Banking integration

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The payments of the invoices are done through bank accounts, and creating invoices but not syncing with the bank account, might cause balance mismatch. To overcome this issue, we have ‘Banking Integration’. By using bank reconciliation you can easily associate your bank transactions with your invoice line items.

For syncing your bank transactions and your invoices, follow the steps given here.

  1. Partners integration

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Partners integration is the term that we have given to our tie-ups with NBFC and various other banking organizations, for providing a credit line to help businesses from running out of money.

The easy integration and well-defined ways of using them are all meant for making cash flow easy and invoice management even easier. We at numberz understand that it is important to make accounting smooth, but we also know that it is even more important to be comfortable with a software, to use it frequently, and that’s why we have these integrations and much more in the pipeline for the coming releases. We hope you’d find them useful.

Doubts? Problems? Confusion? Need help? Get in touch, anytime!

Ease prioritizing with numberz

Stress vs. Growth, Team Up With numberz

With the growth of digital age, and the advent of social media, the marketing has changed a lot for everyone, for every sector, and hence the competition has become tremendously perplexing. The existence of your venture needs to go through a lot. If you want to grow, you need to pull yourself out of the entangled and vicious cycle of this deadly competition.

 

While the competition might be a lot for calling forth problems to the ventures, it is not the only stumbling block on the way of success. Once you place yourself on the path of becoming a businessman (or a businesswoman), the options multiply and so do the problems. But do you have apt resources to cope with your problems? Do you have enough time to invest into the important and more important stuff?

You ask what problems? Well, let’s look at them one by one! (And we’ll elaborate how you can cope with each one of these, very smoothly)

 

Translating your cash gap

We, have come up with the credit line for businesses, in which we get basic data from you and after calculation of your turnover and your CIBIL score. You get your cash gap, also known as ‘valley of death’, filled and hence your business grows better than ever. We bridge your cash gaps and hence help your venture prosper!

 

With a 4 step process, you get the credit line, and hence the cash management becomes better than ever. Your contact details, your financial data (just the basic one), and BOOM, you get a way to fill up your cash gap!

 

Ease prioritizing payments, with numberz

The expense is one thing that needs to be managed very efficiently. numberz makes it easy to get real-time insights upon your cash-flow, and hence you decide what must go, where, and how much? Your bank accounts, your expenses, and your business, all stays in pace, according to you!

 

Paperwork is a headache to manage, and with numberz, you don’t need to entangle yourself into that! You can create new bills online and can upload or import old bills using Excel. As easy as, single click.

Similar to your invoices, your expenses need reconciliation too. But why to do that manually, when we can do that for you? Your bank account will always be in sync with your expenses and invoices, no matter what!

When you are able to see your business cash flow, the payments will be easily prioritized, and with prioritizing, the horizon of growth expands immensely.

Integration, for a smooth working pattern

Most of the data flow related to finances is saved and pondered upon in Tally and Excel. We understand that your systems must not be hampered. Hence we provide integrations with both of these. The flow, the integrations and the finance, all appear to be a very important set, that must be taken care of.

We help you manage your invoices, your expenses, your advances (on invoices), your account collaboration, we help you be in sync with your bank, and we integrate Tally and Excel for your smooth workflow.

 

Don’t let invoicing vex you

When you are continuously involved with your work and you need to look into various factors, missing a payment is something that can happen. But, you can NOT miss a payment. Right?

Well, we at numberz, make sure you do not miss any of them!

How? You ask?

You can create effectual invoices, in a jiffy, and can accept online payments quickly. This means you’d get paid faster. Your invoices can be estimated and created effortlessly, within a few clicks. You’ll have e-mail integrated, and hence you can send payments and reminders via e-mail. The invoices will be tracked and balance your cash gaps when you receive payments.

 

Advantages of invoicing with numberz

Your business will be GST ready, and hence deadlines won’t startle you!

Have you heard someone say, “Looks do not matter”? Well, that person was wrong. Why? Looks matter, and hence your invoice must be professional enough. For this, we provide already created templates, which can be e-mailed instantly.

Cash nuisance is something that irritates most and hence, Numberz provides you with a platform where clients can pay you via online options, be it net banking, online wallets, credit cards or debit cards. No more wrangles over payments!

Delay in payments is something that every business has to go through, but now you can send reminders and hence can quickly follow-up upon the payments.

Invoice reconciliation consumes a lot of energy on the part of accounts, but why waste time when your invoices can directly be matched with your bank accounts. No more manual intervention required!

 

 

With all these features at hand, what is important is accessibility. All the expenses, invoices and every other feature that you’ve loved about Numberz, are accessible everywhere you go, and on every device you use. The power of the Internet has emerged to be a vital factor that is ruling the world when you can, why don’t you use the internet as your helper?

 

Growing beyond horizons and expanding your venture in the direction of your dreams requires a lot of tough decisions and a lot of efforts. Entwining yourself amid the selection of the tool to use and investing your energy only on your finances, you might get distracted from your real passion. Your passion is the sole reason for your venture’s existence, and it must be given sufficient value. We, at numberz, understand this and hence have made the process of receiving payments, deciding expenses, and getting pre-approved loans, so smooth that you need to invest only a few clicks to your accounts and finance. Retain your energy for the real you, the real cause that your venture stands for; and we have the accounts issue resolved for you!

Let us know about the problems you are facing at hello@numberz.in

Know and Fill Your Cash Gap

Let’s Fill The Cash Gaps

If you have registered yourself on Numberz or are checking out the way it works, you are most likely a person working around money for your enterprise, and hence, you must have witnessed cash gap yourself or have seen someone you know, go through.

 

The world revolves around businesses and businesses have money in their core, and hence ‘steps in’ the most dangerous problem of any business, “the CASH-GAP.” Some refer to it as ‘valley of death,’ for businesses, of course.

 

Having heard the word twice now, what exactly is cash gap?

Well, remember that time when you were waiting for a pending payment from a client, and a new investment requirement slammed itself on you?

That situation of you short on money for putting into the investment requirement is called cash gap.

 

According to the ‘Gompers and Lerner study,’ this challenge is the cause of 90 percent dying ventures within the first three years of their establishment. Well, don’t be one of them!

 

Cash Gap Is An International Problem

Most of the countries in the world are either developing or underdeveloped and hence the growth and failure of businesses is highly dependent on the cash flow management.

 

India And The Culture Of Business

As per stats, businesses and self-employment are the most prominent source of employment growth and contribute a major share to industrial production in India. This leads to even more pressure on the businessmen to maintain themselves and their identity.

 

Your Objectives And Financial Goals

Normally businesses need to invest in two type of goals, the short-term objectives, and the long-term objectives. Both of these behold equal value and hence the need to struggle in both the arenas steps in. This makes the exertion even harder.

 

Plan, Monitor, And Control

When it comes to cash management in enterprises, planning is the key. You need to plan by keeping in mind, all the buffers (and problems) that may arise and then monitor accordingly. While monitoring is important, it is also equally significant to control your expenses to expect most out of your investments.

 

Why Not Banks?

Cash gap and lack of cash management is a huge problem for all the springing enterprises, as huge as it leads to a summation of rupees 2.95 trillion (when cash gap is summed, of course). This gap is ever expanding, the reason being, the businesses especially SMEs are firms with financial requirement quite large for microfinance to be possible, but quite small for being solved by corporate banking models. SMEs are also a little riskier to be invested in when compared with corporations, and hence banking models in India are not very supportive.

 

How To Be Safe And Productive?

Ploy With Strategy!

Your strategies must include the cash management, liquidity management and lowering the cash gap. For all this to be possible, you need to know your clients and hence their way of working. You also need to have ample buffers, so as to avoid the vicious cycle of debt.

 

Give Government Methodologies, A Try!

Looking at the huge part of the economy that businesses and organizations like them are supporting, the government is also stepping in to help the growth rate rise. MUDRA is a scheme launched by the government, for funding the SMEs. It is an initiative having the sole intention of upliftment of SMEs and start-ups and hence the economy in general. The government has also launched ‘Make in India’ and ‘Start-up India’ schemes, which might benefit you. Remember that for this source to help you, you’ll need quite a lot of efforts, so prepare yourself before jumping into the realm of government funds!

There is one more way to escape the ‘valley of death’ and reach the heights of your dreams!

 

We at Numberz, have come up with a way of filling up the cash gap that stays only between you and us! We provide ‘credit line’ to our customers.

 

Well, you ask, what is ‘credit line’?

It is a pre-approved loan for those businessmen who are in dire need of finances. We provide working capital loans on the basis of your turnover and CIBIL score (or credit score). When you need to apply for a loan or need to cope up with a cash crunch, the maintained credit score (a.k.a CIBIL score) always helps.

 

How is it useful, or better than other methods?

It is not like this is the best among every possible option but the most feasible and easily accessible one. We understand that your energies must be invested in coming up with dazzling ideas to make your business best and that you must not be itching your head searching for options to get financial support. Hence, the credit line is just a few clicks away from you.

 

How can you get the credit line?

This is a 4 step process (we are not lying):

Step 1: Share your contact details with us.

Just the basic one, you know, we’ll need to be in touch, to make the process as smooth as possible.

 

Step 2: Share the most basic data

We’ll need the company details and a few documents for enrolling you up for the credit line. Trust us, they are the most basic ones.

 

Step 3: Determine your credit line

You get to determine your credit line limit, and we’ll guide you according to your turnover and your documents.

 

Step 4: We’ll get back to you

Relax. Work. Invest time in meaningful things. We’ve got this covered.

 

You feel it’s too simple to be possible?

Well, that’s what we’re here for.

 

With all that being said and your cash gap bridges in place, we always want your best. We’ll be on your side, whenever you need us and your brainchild will prosper like never before. Because, now, you can give it your full attention.

Got any question? We’re here to help. Feel free to reach us!

Small Business Finance

5 Small Business Finance Basics You Must Understand

Finance is at the core of every business- there is no denying that. However, while large businesses can afford to have the best finance gurus to keep tabs on the money, small businesses often have to learn a lot of these things through trial and error. There are many moving parts in the finance management system which is why it can be overwhelming to keep everything under control.

Here are five small business finance basics that you should understand to run your company efficiently:

1. Profit Margin

The first thing to understand about margins is that they are of two types- gross and net. The former is used to measure the profitability of a single commodity. So, if it costs you Rs. 2000 to make a product and you are selling it at Rs. 2500 then your gross margin is Rs. 500. Most small businesses use gross margin as a metric for their profits. However, looking at the big picture it isn’t of much use, and here net profit margin comes into effect.

Net profit margin is calculated by deducting all of your business expenses from the total sales and dividing that figure by the total revenue. So, if you generated Rs. 3 lakh in revenue last year, and your total expenses were Rs. 1 lakh then your profit margin can be calculated as:

Profit margin= (300,000-100,000)/300,000 =  .66, or 66%

It is important to note that profit margins are industry-specific. Thus, you will find that business owners in some industries make more money than those belonging to other industries. For instance, many big food companies have net margins of just 4% or 5%. However, consultancy companies can have way higher margins, because the overhead there is little.

When you start your business, your margins are usually high, but as it scales you have to buy more equipment and hire more staff, which eventually lowers the gross margins. However, the net margin is what matters at this point, and it can increase if you make the right business decisions.

2. The Balance Sheet

Balance sheets serve as a financial dashboard for your company which you can refer to at any point to time to get a quick understanding of where you stand financially.

There are three main components of a balance sheet, which are:

Assets

There are mainly two kinds of assets: current assets and non-current assets. The former are most likely to be converted into unrestricted cash within one business cycle (12 months in most cases), but the latter will not. Inventories, accounts receivables, etc. are considered as current assets.

If you have a large number of assets or cash on your balance sheets then you can attract investors easily. This is because these can be used for protection in rough times or for scaling the business in future.

Liabilities

Just like assets, liabilities are of two types: current liabilities and non-current liabilities. Current liabilities are obligations that must be paid within one business cycle, such as payments pending for suppliers, etc. Non-current liabilities are long-term obligations such as loan debt, etc.

Equity

Equity is the ownership interest of shareholders in your company. It can be calculated by deducting total liabilities from total assets. Thus:

Equity = Total Assets – Total Liabilities

Businesses often have to sell equity shares to raise capital for purchasing equipment, making investments, etc. However, each time you sell you lose a portion of your company. Thus, you would want to hold onto to your business as much as possible. Selling an investor 51% or more of your business in equity means giving away the decision power. This can change everything, and thus be chosen only as the last resort.

3. Cash flow

Cash flow is the total amount of money that comes in and goes out of your business. It is one of the most important numbers that you and your stakeholders should know about. Unfortunately, it is often overlooked in lieu of other numbers on the balance sheet and income statement, etc.

New businesses often use the phrase “to be cash flow positive”. It means that you are bringing in more money than you are spending. Similarly, to be cash flow negative means more money is being spent than generated. Or in other words- the business is actually losing money.

It is important to make cash flow projections a part of your budgeting process to stay on top of the financial activities. Not having a sound understanding of how cash flow works can lead to disastrous results. For instance, you can end up waiting for payments from clients while there are several bills to be paid already. There should be sufficient cash flow so that you can cover all the expenses while staying cash flow positive.

4. Business Financing

Funding is one of the major challenges that small businesses have to face. Whether you need initial funding to start a business from scratch, or to meet short-term obligations it is important to get the money from the right source. Making a wrong decision here can have serious repercussions that includes losing a large portion of your company. The following are two of the most common business financing options that you can consider:

Debt Financing: Debt financing is the simplest way to fund a business. It works the same way as any standard personal loan or home loan works. To get a business loan you can simply contact a bank or a P2P lender (which is becoming more popular lately) and submit an application for the same.

Equity Financing: Businesses only go for equity financing when they are unable to get a business loan. This is because while you don’t get debt on your hands in this method you lose something even bigger- a part of your company. You basically sell off your company share to a venture capitalist. So, you don’t have to pay back the money, but the seller becomes a part-owner.  Equity financing is also more complicated than debt financing. You have to consult with the existing investors before making decisions and work on the legal aspects of the transaction before finally receiving the money.

5. Payroll Calculations

Payroll processing is comprised of calculation of payments that you make to your employees. Since there are several factors involved the process can be quite complicated.

According to the minimum wages act of India, you have to include some mandatory components in their payrolls, such as Basic (basic salary), DA(Dearness Allowance), and HRA(House Rent Allowance). You also have to make certain deductions from the salaries in the form of TDS (Tax Deducted at Source), etc.

Understanding business finance basics is imperative to a successful business. Without this money management can become complicated and difficult to track. Thus, it pays to get a sound understanding of how the business finance works and use it for making the business decisions.