Making cash flow processes efficient for a business is one of the biggest concerns that regularly comes up when an employer wants to make sure there are no cash flow failures, but it inevitably robs many businesses of their sleep. Problems in the payment process and what this causes in the correct cash flow, is often one of the main obstacles that prevent a business from thriving.
And the truth is that the correct business and financial management of your accounts can save you a lot of time and suffering. Within financial management, payment processes in companies are one of the most important processes to control. In the following article we will see how to take your payment processes to another level, thanks to remote tools and good business practices.
What do we mean by payment system processes?
Before being able to improve any process, it's always necessary to understand its scope and what it refers to. We cannot make something work easier if we omit valuable and basic information about its origin. So, let's understand that this process is described as the systematic way of making payments to suppliers, service providers and personnel, as well as treasury control. It includes the process of payment of goods and services, payroll, including all the areas that should be involved, such as accounting, treasury, payroll personnel, the directors of each area, the general manager and in general all the people and departments around which payment processes occur.
In many companies, it's believed that payment processes should only be the responsibility of the experts in charge of accounting and financial matters, but in reality, it's a responsibility of everyone involved in it. Simply put, if you are an employer, you should learn about the payment processes in the company. If you are an employee, too. That way you avoid misinformation and misunderstandings down the road.
The payment process describes the steps from the moment an invoice or payment request is received, until it's approved, and the payment order is made, proceeding to its accounting registration and information to the corresponding administrative areas. Its scope encompasses all the activities associated with the identification of payments to be made due to the purchase of materials, equipment and/or hiring of services or personnel, as well as the steps of its internal management from the receipt of the payment document to its execution and accounting.
Tip 1. Use the best remote tools.
Nowadays, it makes no sense to continue using paper accounting without automation. The best advice then is to look for the best paystub generators on the market. These platforms not only help you manage your payments to your employees, but also give you efficient tax information.
Understanding the current tax laws, calculating the hours worked by your employees, managing deductions, generating pay stubs considering taxes paid and to be paid, sounds like a lot of work for a company. And today it's totally unnecessary to spend staff and time doing something that today, technology can do for us.
But don't get me wrong, we are not saying that employers should not know the tax laws or how payroll processes work in their company, just that it's important that, once you have the knowledge, you better acquire a paystub generator to work for you. In addition, many of these platforms also include other programs or suggested programs to perform the rest of your payroll processes in your company.
Tip 2. Process and manage information efficiently
While the first step is to acquire a forefront technology platform, to start off on the right foot and ensure that your payment processes are successful, you must be able to collect all the information you will need. That is, you will never have to wonder where a certain document is or why your accounts don't add up.
That is why it's essential to create an efficient information management protocol that is processed in a precise and repetitive manner. This means that you always know where the information is in case you need to look for it, which requires that your work team is highly organized and that they respect these protocols.
Tip 3. Segment your accounts receivable and payments.
Once you have collected the information and downloaded the total accounts receivable and payments to be made, it's time to sort them to understand in what state they are and in what time (period) of payment you have to manage them. You can segment your accounts by range of amounts, by days of payment, by debtor, etc. The higher the classification, the better you will understand the total of your accounts and the better you will prioritize the collection and payment process.
Tip 4. Create communication and automation channels
One of the points that many companies neglect is communication with the customer and with their employees. The way you communicate and follow up on your payments has a direct correlation with the percentage of non-payments you receive. Why? Mainly because we are impacting the perception of the customer and your employees. For example, if your customers have several suppliers to pay, they will surely prioritize those who have received emails alerting them of the due date, as opposed to those who don’t send anything until the start of the overdue days. Or if your employees don’t receive information on time to make or receive payments, it's very likely to create an unbalanced work environment.
Make sure you define your communication strategy with everyone involved in your company, from employees to customers, adopt tools that allow you to automate and personalize these communications and use the right channels where you know that your information will always arrive in a timely manner.
Tip 5. Look for information in the right place and with the right people
We are often accustomed to wanting to solve everything ourselves, but the truth is that there is no better advice than to seek help from experts. When it comes to improving your payment processes, the best investment will always be training. Sometimes companies decide not to invest in bringing in experts to find the areas of opportunity in a company, and this turns out to be more expensive in the long run. Or equally, they think that investing in software or technology platforms is not necessary. Believe me, it is. Investing, for example, in the best paystub generator in the market, will save you hours of research on tax laws and payroll management. Hiring an expert to train the financial and accounting areas on the best way to streamline their processes and stay ahead of their payment processes, in the short, medium and, mainly, long term, will bring economic benefits to your company.
