I want to share with you a few stories of companies in the community I have worked with recently. For client confidentiality, I will not disclose names of people or companies but these are real life events that occurred in the last 30 days.
I met with an owner of a local restoration and cleaning firm. It became clear they were leaving thousands of dollars on the table in limbo waiting on check payments from their clients. We discovered the system they were using was an invoice and check payment system.
They were not emailing the invoices but mailing them via snail mail to their clients and waiting on payment terms that were net 30 or even net 60 from the receipt of the invoice. Obviously, this was locking up their cash flow resources as they invested in the time, people, and tools to complete the job 30-60 days ago, but were still waiting on payments.
Green Business Solutions Increases Cash Flow
When we talk about refining systems and integrating technology, it does not have to mean servers and computers and smart phones. It can be as simple as integrated a virtual terminal (credit card) system that allows for payments online, on the smartphone on site, or even over the phone.
So that Monday we calculated up the amount of money left in limbo, and we found a virtual terminal for our client that takes less than 3% of all transactions to process the payments. Once the system was implemented they wanted to test it, so they called a client who was 60 days due on a hefty balance.
Because of how much more convenient this was for the client, they collected the payment that day over the phone. This system single-handedly provided them the resources they needed for the next 60 days as they start up a new client and staff.
Amazing right?! It is! Something so small it is easy to overlook, but it has a significant impact on the business at the end of the day and can provide more instant cash flow for a business.
Green Business Tactics Improve Tracking and Reporting
The next story I have for you is about inventory. So many businesses out there that are in manufacturing, product development or even service industry have tools they need for the projects they are doing. In my last corporate job, we had nuts, bolts, screws, and even bigger items like tools, wood, carpet that needed to be tracked and recorded so each project was billed accordingly for the actual items used.
That’s a massive amount of information to track and measure. Smaller firms who are solo practitioners like the handyman, plumbing, or landscaping industries know what I am talking about. How do you keep up with everything and help keep your honest employees honest?
Well, it just so happens that there are tools to help with inventory management. A friend of mine came to me recently and they are ready to hire some people, but they do not currently have a way to know what inventory they have on hand to know that they have enough supplies for a new employee. With this in mind, we are using a digital tool that will allow us to input the inventory this firm typically uses from pipes and insulation to tools, and even the nuts and bolts they need to secure their products together for function.
This system will need to be set up, so we are going to get dirty with the client and count the items they have on hand now. We are then going to analyze the items they use in a standard job and how many standard jobs they do in a 14 day period.
From there we are going to leverage technology to keep count and remind us when it is time to reorder specific materials every 10 days. This why the business is never short on supplies but their cash flow isn’t tied down in inventory they aren’t using.
In this example, it is really tedious but it isn’t difficult. It does take time but the key is to take the time on the front side and organize early. Once the technology is in place then it will help the business save not only time searching for the items needed for the projects but also saves the cash flow. The inventory system we are using is really affordable for small businesses which help again with the cash flow of the organization.
At the end of the day, my friend will have a way to know exactly what materials he needs and where to find them and when to order more which will allow for an employee to come on board and duplicate himself. The easier we make our lives, the easier we make the lives of our employees.
Another Way Technology Helps
If you consider the two examples above of integration of technology and you are thinking to yourself, “but I can do that without technology. All I need is some paper and filing cabinets.” You are correct, you can do the tracking that way for the inventory. But you can’t do credit cards that way as those are digital money and to accept digital money you need a digital system 🙂
But let’s talk about the inventory for a moment. What would it take for you to manage your inventory? If you did it the paper and pen and filing cabinet way; you would need to hire someone dedicated to bean counting day in and out and remembering to order specific materials. This would be a full-time job in most cases.
We then need to consider the bottom line. This comes down to a math equation of cost versus benefit of hiring a person to manage the inventory or ordering a digital system so you can more easily track the inventory.
Let’s talk about tax benefits for a moment. If you hire someone, there is a minor tax benefit but far more unemployment taxes, health care taxes, and hidden fees. If you integrate technology, it isn’t just a tax write off, it allows your accountant to quickly review your books and work up your tax paperwork. Which saves you money as the accountant is spending less time in your books.
Catch the drift?
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