13 Types of technology that can help improve cash flow

Business owners are often so busy with day-to-day operations and management that they find it tough to gain a big-picture view of certain financial aspects, such as cash flow. It is important, however, to see the forest in spite of the trees and understand what is possible with a few minor changes. In addition to monitoring, predicting and managing cash flow, it is important to create new revenue streams by learning about and leveraging technology that can improve cash flow and the overall performance of the business.

One simple way to get started is by educating yourself on types of technology that can create additional sources of cash flow, can decelerate the flow of cash out of the business and can accelerate the flow of cash into the business. SCORE, a nonprofit association that helps small businesses in partnership with the U.S. Small Business Administration, offers these examples of helpful technology, which you, the business owner, can use as tools to manage cash flow and develop a stronger financial position.

Technology that helps create cash flow: 

  • Smartphone-enabled credit card readers: These help businesses connect with new customers at trade shows, conferences and other events; make it easier for clients to purchase because of the expanded payment option (think of a salesperson at a client’s location).
  • Viral deal sites: Sites like Groupon, LivingSocial and Angie’s List can generate prepaid sales, reaching new customers unreached by typical marketing efforts.
  • Ecommerce sites: Even if the business already has a website, can sales be generated through it?

Technology that helps accelerate cash inflow:

  • Accounting software: Invoices can always go out on time when automated, and it’s easier to keep up on collection when receivables are tracked automatically.
  • Dashboards and “calculators”: Software that creates dashboards can help monitor changes in Days Sales Outstanding, identify the biggest credit risks and the receivables with balances over 75 days past due, flag increases in inventory days. Some software applications help calculate the impact on cash flow of small changes over time to one or more financial metrics.
  • Remote check capture: This technology (available on mobile phones in some cases) can shave days off average timeframe for check collection and some banks offer this for free or low cost to business customers. It’s especially helpful for businesses with multiple locations that have to forward checks to a main office.
  • ACH (automated clearing house) debit: This can speed up collection of one-time payments or can help create predictable collections for recurring, periodic payments. It gives immediate credit for deposits and can be useful to process down payments on large orders.
  • Credit card payment acceptance: Fees will be higher than for ACH debit services, but accepting a credit card payment from a past due account can be worth it simply to secure the payment.
  • Electronic bill presentment (EBPP) or electronic invoice presentment and payment (EIPP): Allows the business to email the bill directly to the B2C or B2B customer and include a link to payment options.
  • Other digital payment options: Amazon Payments, PayPal, Apple Pay. These can help small service businesses eliminate the need to bill some clients for services.

Technology that helps decrease cash outflows:

  • Accounting software: This can be used to set up the accounts payable system to automate payments for just in time delivery.
  • Credit cards: SCORE says that some business owners with inexpensive credit cards can use them as follows: Let a bill on a 30-day payment cycle run to the end of the period, then pay with the credit card and pay the card balance with cash when it becomes due. This can delay the ultimate cash outflow for as much as 55 days (assuming a 25-day grace period). Be careful that interest does not accrue during the grace period and that card balance is paid before due to avoid interest and fees that charges.
  • ACH credit: This service that operates through the Federal Reserve allows you to credit another account to settle on a specific date, and some community banks may not charge businesses for using these.

Evaluating new technology options for your business and understanding the potential impact of various technology decisions on cash flow can help you create significant opportunities for enhancing your company’s financial wellbeing.


Research Specialist at SageWorks
A research specialist at Sageworks, a financial information company that provides risk management, financial analysis and business valuation solutions to accounting firms, financial institutions and privately held companies.

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About MaryEllenBiery

A research specialist at Sageworks, a financial information company that provides risk management, financial analysis and business valuation solutions to accounting firms, financial institutions and privately held companies.

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