Struggling with Startup Finances? These Innovative Payment Solutions Will Save You

Startup Finances

Every minute and every dollar counts when you’re building a startup, so finding ways to optimize is crucial. One area where you can make a big impact is payment processing. Surprisingly, nearly a third of small businesses still process ad-hoc payments manually, even though they make up the majority of their revenue. Outdated systems like these can create inefficiencies that can hold you back, but adopting innovative payment strategies can keep operations profitable and cash flow steady, giving you the fuel to keep moving forward.

By optimizing your payment processes, your startup can save anywhere from 60% to 80% on payment processing costs. This can increase your cash flow and make funds available for other critical areas like product development and marketing.

Automate your invoice processing

Consider how much time you might have spent sorting invoices, getting approvals, and scheduling payments manually. Automating this process will save time, keep everything on track and avoid missed deadlines.

Manual payments can lead to errors, delays, and missed payments, which can lead to damaged relationships with suppliers. By automating AP, you can optimize your payment process. Businesses can save up to 80% on processing costs with AP automation, which also reduces invoice processing time by more than 70%. For a startup, this isn’t just time saved – it’s time invested in growing your business.

Some platforms offer AP automation tools that allow you to approve and schedule payments, track invoices, and receive real-time updates. Automation will not only reduce human error, but also provide a single source of truth for all accounts payable data.

Use real-time payments to keep your cash flow moving

There’s nothing more satisfying than receiving payment immediately after completing a job or delivering a product. Real-time payments make this possible, allowing your startup to move money at the speed of your business. Gone are the days of waiting three to five business days for an ACH transfer; now your funds can be available in a matter of seconds. This is especially useful when every day matters, such as during the growth phase. By 2023, 85% of U.S. businesses plan to implement real-time payments within the next year, and nearly 99% of large corporations (those with revenues between $1 billion and $9.9 billion) plan to use real-time payments within the next five years. Platforms like FedNow Service® and RTP® Network make real-time payments a reality, helping companies maintain steady cash flow and reinvest in growth faster.

Customize payment methods for your customers

The easiest way to accelerate cash flow is to make it easier for customers to pay you. Offering multiple payment options like instant payments, credit cards, same-day ACH transfers, and digital wallets removes friction from the payment process, which means faster payments and happier customers.

Imagine your customer wants to use instant payments, but you only accept credit cards. They may delay payment or even reconsider the purchase. Providing customers with options speeds up payment and reduces friction. Look for platforms that allow you to integrate multiple payment methods. Many of these platforms can be customized to suit your payment schedule, allowing customers to pay quickly.

Implement a cash flow forecasting tool

Cash flow forecasting is crucial when planning for growth. By accurately forecasting your cash inflows and outflows, you can make informed decisions about spending, hiring, and investments. 82% of businesses fail due to poor cash flow management, making cash flow forecasting a vital tool for any scalable startup.

Let’s say your cash flow forecast shows a loss in the next quarter. Rather than panicking suddenly, you can prepare by cutting unnecessary expenses or finding short-term financing options.

Use platforms that offer integrated forecasting tools. These tools help you make accurate forecasts using historical data, allowing you to plan ahead and make proactive financial decisions that keep your business on track.

Take advantage of early payment discounts and negotiate with suppliers

Saving on expenses can be just as effective as generating new revenue, and one way to do this is by using early payment discounts.m