Cash flow can make or break a business.
In Silicon Valley, startups use influxes of cash to scale rapidly. Google received early funding from a few angel investors, including Jeff Bezos. Facebook turned an early $500k investment from Peter Thiel into billions.
That’s the make.
To see the break, we only have to look back to the 2008 financial crisis. Even $639 billion in assets couldn’t save Lehman Brothers from bankruptcy. It was only thanks to the US government that others, like AIG, Chrysler and General Motors, were spared similar fates.
Finance: A Necessary Evil
Unfortunately, despite these recent reminders, the power of finance is still regularly underestimated and rarely understood. Often it’s seen as something that must be done. A necessary evil.
But finance professionals know that finance isn’t just necessary to run a business, it’s a powerful tool for growth.
A focus on finance can help a business scale through:
- Innovative approaches to increasing cash flow
- Conscious headcount planning
- Effective implementation of technology
- Increased visibility into financial standing
When you have a strong handle on how much money is coming in, how much is going out, and how many people and resources are required to scale, you better understand what exactly you need to do to hit your growth and revenue targets.
Fully Leveraging Finance
When a transportation company fully leverages the power of finance, great things are possible.
A financially disciplined company can:
- Achieve faster organic growth
- Be better positioned for acquisitions
- Curry favor with customers by promptly paying debts
- Use financial standing to win more contracts (because people prefer to do business with companies who can prove they’re going to stay in business)
- Better mitigate financial risks of every kind
- Secure business loans via good financial standing
Far from a necessary evil, finance has the ability to propel businesses toward better financial futures.
The Cash-Flow Game
In the transportation business, in particular, finance can be invaluable because poor cash flow is a perennial problem. Transportation is just as much about the movement of money as it is about the movement of goods. If you can move cash faster and more efficiently, you can get ahead.
One way to do that is to use a mobile capture application to get PODs back to the office as soon as they’re signed.
From a finance perspective, waiting for signed PODs to come back to the office is inefficient and wasteful, especially now that we have the technology to completely eliminate the lag time. When drivers can scan PODs with their phone and send them automatically to the back office, billing can start instantly and you can cut hours, if not days, off your time-to-bill.
Using a back-office automation platform like Origin makes documents easier to find and faster to process. Billing takes less time, DSO goes down and cash flow improves. Plus, you gain better visibility into the flow of transactions and can better assess your company’s financial standing at any given time.
The upshot is that you’re able to grow and scale your business at a faster rate of speed. That’s what taking a financial approach to growth is all about.
Jay is an Enterprise Account Executive who works with organizations to improve their processes through business process automation consulting. Jay most often works with Finance, Operations and IT executives to better understand their departmental workflows and see how integration with Synergize can drive efficiency to their processes.