One of the main challenges for small businesses is managing finances efficiently and effectively. While the business case, location and people might be right, some businesses can come unstuck by struggling with their finance processes.
Some issues might be due to a lack of finance experience or expertise within an organisation, meaning there is a lot of learning as they go along. But it can also be because traditional banking services make it harder for them to get things done.
Traditional banking can make things overly complicated and expensive, if monthly fees are charged for business accounts or if certain transactions, such as international payments, carry a cost.
By conducting the majority of financial transactions and processes using virtual bank accounts and e-payments, small businesses can go a long way towards overcoming these issues, taking much of the hassle out of the financial side of running a business.
Virtual bank accounts can handle all manner of financial processes for small businesses. For example, the ability of e-payments to support hundreds or even thousands of payments with a single click of the mouse removes the time-consuming task of making payments and settling invoices one by one. The only expertise needed is the ability to use Excel to organise the payments.
Paying employees can also be made more straightforward with virtual bank accounts, which are able to handle the kind of mass payments required for monthly payroll.
The greater transparency offered by electronic payments means they can create a virtual record of where money has come from and been moved to. Payments can be linked directly to clients and suppliers, meaning any errors or disagreements can be resolved more easily.
With payments being made instantly, and fees often deducted at source, payments also give companies a clearer, near-real-time view of their finances, making it clear how much money is available to the business by the hour.
Virtual banks simplify the payments process, as they accept payments directly from users’ clients, meaning money can be instantly sent from any country in the world. As a result, only a single account is needed to collect, hold and send payments in multiple currencies and channels.
Virtual banking platforms can also handle the collection of payments from known marketplaces that they might sell through, such as Amazon. And due to lower overheads, businesses that use virtual banking aren’t subject to the same level of fees when customers receive (or make) international payments.
Another benefit of using e-payments is that employees – from MD to intern – can devote their effort to higher-value work for the business
For instance, with cash, there will be takings and the float to deal with, which can be time consuming and hard to keep track of. E-payments ensure there is less cash to deal with, so staff can be spared from such routine tasks.
In addition, virtual banking removes the need to visit a bank branch when setting up new accounts and transactions. Those running the business can therefore focus more on the day-to-day running of the business and not have to worry about taking time away to sort out finances.
All in all, virtualising your company’s finance brings a raft of benefits. Adopting virtual banking will require a change of mindset, but organisations prepared to make the shift could make life simpler for themselves and boost their business as a consequence.