Are FinTech services the future of cash flow? The results of a wide-reaching independent survey of 4,000 UK businesses to find out how companies manage their cash flow has shed significant light into an area that is reported as a key challenge for businesses across the UK this year.
The results of the survey, analysed in the Soldo Spend Management Whitepaper, reveal costly inefficiencies in cash flow cycles, with up to a staggering £102.6 billion of company spending collectively left unreconciled every year by 18% of businesses.
Heavy administrative burdens, multiple spending channels creating complex accounting methods and a lack of spending autonomy for employees are contributing to significantly reduced productivity and ultimately costing businesses dearly when it comes to tax returns and reconciliation of spend.
The report also highlighted an opportunity for UK companies to utilise new technology and shred the hours that are currently reserved for managing spend, while simultaneously increasing control over company money.
Your business could be draining a huge amount of unnecessary time on locating lost cash and figures – time is money, and both could be spent with more efficacy elsewhere. The problem often emanates from the point of how cash flow within a company is monitored. Where the responsibility lies of how money is allocated and distributed throughout a business can also contribute to a book-balancing headache.
The developments in the FinTech sector have paved the way for companies to utilise financial technology to streamline the process and accelerate company growth. However although there has been some positive improvement, there are still some major flaws in the way businesses conduct their company cash flow. Put simply, the way you choose to allocate company spending within your business is imperative to its success or failure.
Invoicing and receipts have been the most common way for companies to monitor spending. But is this the most financially savvy way to keep on track with the way your business is using its money to benefit the company? On the surface, this method may seem foolproof and at worse leave a small percentage of time and money spent on reconciling any mistakes that are caused by poor cash management. However, look a little deeper and the problems become clear.
The loss of money through simple mistakes, when invoicing and cashing receipts, can add up to amounts that have the potential to affect your entire business. Forgetting smaller items purchased through the business can be easy, but they can very quickly pile up. Make it effortless for yourself to keep track of receipts by using a prepaid card. Soldo provides the simple solution for this by keeping evidence of any receipts and spending incurred and automatically logs and reports them in the smart receipt capture software.
The YouGov report revealed nearly half of the businesses (45%) stated the level of control over company spending is one of the biggest challenges to businesses in 2018. A further 22% of companies were willing to leave a percentage of company spending left unreconciled at the end of each month.
The results prove a clear correlation between time and control on company spending and how this impacts on the way a business run. With the vast range of FinTech services available, the regulation of company spending should not be an issue you expect your business to encounter this year.
44% of companies who took part in the survey agreed that if employees were authorised with a spending card it would increase trust in the business itself, and nearly half (47%) said it would increase employees overall trust in a company’s financial process. Nearly a third of financial decision-makers in companies with between 50 and 249 employees (27%) believe that if employees had a spending card that could be fully controlled, where expenses were reported seamlessly and spending could be monitored in real time, they would spend more responsibly on behalf of the business.
The evidence collected from the large-scale survey highlights the importance financial trust has within a business. Taking advantage of FinTech services can crucially contribute to the way company spending is reported, leaving a vast amount of time your business could be used in a much more creative and constructive way.
This is where FinTech services and developments step in to fill the gaps that current traditional banking systems are not addressing when it comes to business financial services. A lot of B2C FinTech providers are trying to compete with high street banks and traditional retail banks for the consumer market. However, the B2B space is quietly building a strong platform that banks will find hard to turn down.
FinTech services aimed at B2B clients are seeing a real opportunity for innovative and indispensable ways to work alongside banks offering complimentary services that sit beside business banking services. In short, B2B FinTech’s are enabling banks to stay modern in an age where businesses rely heavily on digital innovations. The banks that acknowledge and adopt this now will gain the trust of their business clients in the long run.
Take time to research which FinTech’s can benefit your business the most – it’s a sector that’s here to improve your business in more ways than one.