Cash flow management can make or break a business

Sept. 22, 2015 - PRLog -- Owners & Entrepreneurs can track and bill-back client costs
Save time by automatically following up on outstanding invoices

Xero (http://www.xero.com/) (@Xero) today announced two new features being rolled out in the following weeks that help small business owners improve cash flow and get paid faster: Billable Expenses and Invoice Reminders. According to Xero’s research, small businesses using Xero got paid 30 days faster in 2014 than they were in 2011, resulting in a significant improvement in cash flow and productivity.

According to the ONS (http://www.ons.gov.uk/ons/rel/bus-register/business-demography/2013/stb-business-demography.html#tab-Business-survivals), the UK 5 year survival rate for businesses born in 2008 and still active in 2013 was 41 percent. Research commissioned earlier this year by Xero also revealed that more than a quarter (27 percent) of small business owners find accounting issues such as slow or late payments the biggest obstacles to the success of their business, with the same number saying chasing payments is one of the most difficult parts of running a business. Therefore having a solid plan in place to manage cash flow is essential to ensuring that fledgling businesses survive and even thrive.

Traditional accounting solutions have failed to give small businesses the capability to automate key tasks. Xero is changing the way small businesses operate delivering customers a constant stream of new features to drive efficiency across their business. Billable Expenses and Invoice Reminders will give customers new ways of ensuring their cash flow is maintained, while getting time back from the drag of administration to get on with running their own business.

Invoice Reminders will help small businesses from being a bank

Outstanding invoices are a burden for any business – big or small. In addition to not being able to put this money to work for the business, conversations surrounding outstanding invoices can be uncomfortable. Business owners can automatically send clients a customizable reminder asking them to pay their outstanding invoices. Xero’s new Invoice Reminders will launch in the next few months.

Time sensitive Billable expenses

Commonly referred to as billable expenses, on-charges or reimbursables, these are costs incurred on behalf of a customer when supplying services or products. Recovering these expenses from a customer, as quickly as possible, is key. Incorrectly tracking and billing back to clients equates to taking a loss to revenue and profits.

Rather than stashing receipts in shoeboxes, or using spreadsheets to track costs, Xero’s Billable Expenses allows users to mark a bill line item as a ‘billable expense’ and assign the item to a contact so that it can be applied to future sales invoices.
This feature provides the ability to easily track costs associated with a particular contact and recoup costs. This is critical for protecting profit margins and maintaining healthy cash flow.

Xero’s Billable Expenses and Invoice Reminders will be introduced to customers in three distinct phases:

From now, small businesses can use Billable Expenses to recoup costs and protect profit margins by recording expenses in bills and other transactions that need to be on-charged to a customer.
Over the next few weeks, Billable Expenses will continue to evolve, allowing bank account transactions to be tagged as Billable Expenses, while Xero’s library of reports will be updated to allow for reporting of Billable Expenses.
In the next few months, Xero will make Invoice Reminders widely available.

Why cash flow matters

Cash flow management separates a good small-business owner from a great one. While it may not be as a sexy as making a big sale or scoring a round of financing, business owners who effectively manage their cash flow gain a notable advantage in the market and stay in business longer.

Cash is a valuable resource. Ensuring that a business has enough to meet its needs, is vital to a company’s survival. Many functions of a business rely heavily on cash to operate, including paying staff and buying supplies. Most businesses start with a small amount of cash and as revenues grow, funds are sufficient to cover bills. Problems may begin when entrepreneurs offer credit to customers, take on a loan, or hire an employee, and revenues don’t cover the business’ operating expenses.

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“Cash availability really can be make-or-break for small firms, which is why it’s critical to keep a close handle on invoicing and accounts,” said Xero managing director Gary Turner.

Esther Thompson, founder of TeaHuggers, an award-winning provider of herbal teas, has been using Xero to gain a better overview of her case flow. She said: “Having real-time financial data to manage your cashflow is so important. At the end of the day, that’s the critical side of the business. If you’re not making money then the company’s not going to be viable. These news features are going to be invaluable.”

ENDS

About Xero

Xero (https://www.xero.com/us/) is beautiful, easy-to-use online accounting software for small businesses and their advisors. The company has over 540,000 subscribers in more than 180 countries. Xero seamlessly integrates with over 400 third-party tools, and was ranked No.1 by Forbes as the World's Most Innovative Growth Company (http://www.forbes.com/sites/innovatorsdna/2015/05/13/how-...) in 2014 and 2015.

For more information please contact:

Isabel Blake-Milton

isabel.blakemilton@shinecom.com / 0207 841 7082

Aisling Dinsmore

aisling.dinsmore@shinecom.com / 0207 841 7064