Automation Cash Flow CreditorWatch Guest Contribution Small Business Technology
3 mins read

Newsflash! Automation improves SME cash flow

Automation improves cash flow

Automation is easier than it sounds

Whether it’s ordering a taxi or a meal using Uber, watching your favourite movie through Netflix or simply seeing how you exercise alongside your mates with Strava, digitisation is having a substantial impact on our lives for the better.

I cannot think of a single SME that would not want to improve their cash flow. Inadequate cash flow is one of the main causes of business failure in Australia.

By using some of these digital tools it is possible to get a direct improvement in your cash flow.

So why is it that so many SMEs are still not using them? Possibly lack of awareness, funds, time, fear, or the accountant/bookkeeper’s resistance to change?

The fact remains a lot of these tools are integrated into cloud accounting via APIs and the implementation is actually a lot simpler than it sounds.

Here are some facts

A Small Business Insights Report by XERO found that two-thirds of SMEs were not yet connected to high-speed broadband.

  • 30 percent of businesses still lodge their BAS statements in paper form.
  • 14 percent of small businesses use no IT in their accounting functions.

Doing things the old way and expecting cashflows to improve magically will just leave SME business owners behind.

Where do you even start?

In the world of small business, cash is king and you should be investing in software that will assist in staying on top of cash flow should be a high priority.

There are really only two main areas that businesses should really focus on. Money in (Accounts receivables and credit management) and Money out (accounts payable).

Let’s leave salaries, wages and other operating expenses to the side for the moment.

Here are simple examples to improve cashflow:

1. Monitoring and alerts

Late payments, or lack thereof, can really hurt small businesses. Therefore, it is essential that they have strong credit management in place.

However, lack of time and funds make it difficult to perform due diligence as often as businesses need to. This is where an innovative platform like CreditorWatch comes in.

CreditorWatch enables you to see risk indicators such as payment defaults, court actions, mercantile inquiries, administration appointments and insolvency notices.

A credit score provides you with an instant assessment of an entity’s creditworthiness without you having to perform a thorough analysis plus you also have the option of integrating your Xero or MYOB accounting system.

You can even setup the 24/7 Monitoring and Alerts feature to check all of your customers, regardless of whether you have one or thousands.

2. Debt collections

CreditorWatch also assists with debt collection by providing letter templates with the CreditorWatch logo.

Existing CreditorWatch customers found that by using the CreditorWatch branded templates, there was a 53% increase in payment and the time to receive a payment was reduced by 7 days.

Why wouldn’t you want that?

If you want to see what impact ($ in your bank) a 53% increase in payment and a reduction in 7 days means to you, a financial mentor can certainly help.

3. Faster payment notification and receipts

Do you or your staff still use shoe boxes to keep receipts?

What about other regular bills?

Are these a shock/surprise at month end that means you don’t get to draw a salary from your business?

By using automated bookkeeping and data entry,  you can be more certain your unrecorded liabilities are reduced significantly, giving you a clearer picture of your expected cashflow for the month.

4. Forecasting cashflows accurately

Similarly, if you don’t have a robust cashflow model you could be heading into a brick wall without realising it. This brings together your money in and money out accurately.

Whilst there are many apps that claim they do this well, make sure they are built on a 3-way basis and customised for your specific business needs.

If you need more help reach out to a financial mentor at companies like SequelCFO.


All of these will give you more time to focus on growing your business and to take action when you need to.

Having a plan in place for when you are alerted to adverse changes is important.

If you need to resource your business and change the priorities to focus on adopting these new tools you could either look to gain efficiency from automation for your existing team or augment your available resources with external staff like a virtual CFO.

If you want to find out more, be sure to reach out to Creditorwatch or Lance at SequelCFO.

More articles like this:  The overlooked risk you should be addressing: Your suppliers.


About the author

Demonstrating a strong passion for cash flow and financial modelling, Lance Rubin is the Group CFO for Sequel CFO, a franchise business for premium bookkeeping. He also started his own financial modelling consultancy firm, Model Citizn, following over 20 years of Corporate experience moving from senior leader across Performance Management and Rates Validation at NAB. Lance has extensive modelling experience across financial and professional services.

accounts receivable automation business automation cash flow cashflow credit management CreditorWatch debt collection tools financial modelling monitoring and alerts NewsHub payment times
Co-founder and CEO
Lance is the co-founder and CEO of EXL Cloud. He has extensive modelling experience across financial and professional services. He started a financial modelling consultancy firm, Model Citizn, following over 20 years of corporate experience. His previous roles include Group CFO at Sequel CFO, CFO at Banjo Loans, Head of Performance Management and Rates Validation at NAB and CFO at Investec Property Funds.
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