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Keeping on top of cash flow during Covid

July 23, 2021 Lauren Jenkins

Top 5 tips to keep on top of cash flow

If you own a business or manage a business’s finances, you know that staying on top of cash flow is the key to keeping a business running. This is constant battle for most businesses but throw Covid into the mix which for many businesses means less money coming through the door, and it gets even tougher!

We’ve put together five tips for riding out a cash flow slump to keep your business in the black and ready to go for the future.

Tip 1. Use your credit card strategically

You have probably heard about the “up to 55 day interest free period” your credit card offers. But what exactly does this mean and how do you take advantage? The reason it always says “up to” is because the amount of interest free days available depends on what day of your billing cycle you make the purchase. For examples you would get 55 days interest-free on purchases made on the first day of the billing cycle, 54 on the second day and only 1 day interest free if you made a purchase the day before your statement was issued for that billing period.

To be eligible to receive interest-free days, you also must repay your account’s outstanding balance in full by the due date on your statement.

So how do you know what your billing cycle is so you can take full advantage? Each credit card has different rules but you should be able to find your Statement Period on your Credit Card Statement – each statement period runs for about 30 days and there is then 25 days from when your statement period finishes to the payment due date (hence 55 days).

See below example of a Statement period that runs from the 15th June.

15th June

Statement period begins.

16th June

Make a purchase for 55 days interest free.

30 June

Make another purchase for 40 days interest free.

15th July

Statement period ends.

9 August

Payment due date. Pay closing balance in full.

30 day Statement Period

25 more days to pay

Days in total

Eligible Purchases

Don’t forget interest free days only apply for eligible purchases made on your card. Exclusions typically apply for government payments (eg. paying the ATO directly) and some other bill payments. To make sure your Interest free period applies to these purchases too, use B2Bpay as the spend will then be classified as “General Spend”.

What if a supplier doesn’t accept credit card payment?

Again, this is where B2Bpay can help. You can use B2Bpay to pay ANY supplier, regardless of whether they accept card payment or not. This is because you pay your bill with credit card using B2Bpay, and we transfer the payment by EFT to your supplier. This means that you can turn every bill into one that maximises your cash flow.

The take aways?

Take a look at your credit card statement and get to know your ‘Statement Period’
Mark your statement periods and payment due dates (25 days after your Statement period) in your diary
Use your 55-day Interest-free period to your advantage eg. by making large payments on day 1 of your Statement Period.
Use B2Bpay so you can make ANY payment with credit card, and ensure all payments are ‘eligible’ for the interest-free period. You can also schedule payments with B2Bpay, so schedule payment dates as close to day 1 of your statement period as possible.

Tip 2. Cut Costs

This is a good one to focus on if your business has needed to slow down or shut down during Covid. It gives you a chance to take stock of anything you have been paying for that you don’t need.

For example, are you spending money on subscriptions or services you are no longer using? Or do you have insurances you no longer need? Can you renegotiate the terms of outstanding loans or leases? Are you monitoring stock levels at efficient levels? Take a good hard look at a few month’s expenses for your business. Print it out if you can so you can analyse and tick each item off. Look for anything you could cut out or renegotiate. This is something that takes time and brain power that you often don’t have the capacity for when you are knee deep in your everyday business activities. But if you take the time out to take stock and complete this admin task, you could be saving serious dollars over the long run.

Tip 3. Ask for payment extensions

To stay cash flow positive means you need to keep cash coming in as quick as possible, while holding back on expenses for as long as possible.

One way you can do this is to work closely and build strong trusting relationships with suppliers who can offer flexible payment terms. That way you can negotiate and maximise payment terms when you need to.

If a payment is due in 30 days, see if you can extend it to 45 and don’t pay any earlier. And if you’re paying by card, time payment early in your Statement Period to provide you an extra 55 days interest free on the payment (see tip 1). Just remember to not leave it to the last minute to request an extension on payment. Make sure you are always looking ahead at upcoming bills.

Tip 4. Talk to your bank

The Government’s SME Recovery Loan Scheme is designed to support Australia’s economic recovery, by allowing eligible businesses to access finance as JobKeeper is now phased out.

This scheme is designed to help small to medium sized enterprises (SMEs) get access to cheaper funding, with the government guaranteeing 80% of eligible business loans.

Most bank lenders and many non-bank lenders are taking part and are also offering repayment holidays for up to 24 months as part of the scheme. Loans include term loans, overdrafts, working capital facilities, leases and hire purchase agreements. Different criteria will apply depending on the individual business and the lender. Get in touch with lenders to find out what options they have to suit your business cash flow and situation.

Tip 5. Get your invoices paid faster

We will say it again. Keeping on top of cash flow is all about ensuring you keep cash coming in as quick as possible.

Some ways you can do this is to always make sure you send invoices as soon as the work’s completed or products are delivered. Use invoicing software to ensure it is easy to do this by sending out templated invoices on the go. And don’t let restrictive payment methods stop your cash flow! By accepting all major credit and debit cards as payment options allows your customers to manage their cash flow options too and pay you online 24/7.

You can sign up to B2Bpay to accept card payments on your invoices at no cost to you! Click here to get started today.

Extremely happy with the B2Bpay service. It has given me the ability to offer my clients another payment option. Previously I was only able to offer direct debit, now my clients can pay by their cards. The staff and service I have received in helping me set this all up has been exceptional!

B2Bpay works well within our business, It is easy to set up payments and to make recurring payments including to contractors who would not normally accept payment via credit card.

B2Bpay is a great way to pay suppliers, even if they don't accept card. We've even put it on our invoices as a handy payment option for clients to pay us.

Earn 10,000 bonus Qantas Points for the first $10,000 received*

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Tax Tips for Small Businesses

July 29, 2021 Lauren Jenkins

Paying tax is just one part of running a business, however, not having good processes can lead to mistakes that can cost you time, money and stress. While the temptation might be to worry about tax only when the EOFY comes around, good tax planning involves thinking long term. A good idea is to kick off the new financial year with a plan to sit down with your accountant early on and discuss your business strategy. That may include growing your business, improving productivity, or planning for sale. You will need good advice early to help you formulate a plan that enables you to meet your business and financial goals.

Our top 3 tips include-

Seek Advice and Support – engage a tax professional who will be able to keep you on track and avoid costly mistakes. This year it’s even more important to ask the right questions and provide relevant information to help your adviser determine if you’re eligible for any COVID-related tax incentives and deductions. You can read about some of the incentives in our article on the federal budget here.
Keep Good Records – it’s essential that you have good records that meet tax requirements. Make sure that your business processes include regular reconciliation of business figures with bank statements and all source documents (including tax invoices and receipts). One of the easiest ways to do this is to use Accounting Software and connect to your bank feed. That way you can easily log in and reconcile payments on a regular basis. If you make payments using B2Bpay, our clever integrations with Xero, MYOB and Quickbooks makes it easy to record and reconcile these payments. The same goes for accepting payments. Read more about our integrations here!
Use Technology – smart businesses leverage technology to help run the business by using accounting software systems, mobile apps and point of sale software. All these can help you save time and report income and expenses accurately and in real time. For example, if you use Xero, we’ve compiled the top 5 apps to connect to to help run your business here. Your adviser will be able to recommend the best technology you can implement in your business to help you run your business more efficiently.

This content was put together for information purposes only. The content does not constitute tax and/or legal advice and should not be relied upon as such. You should seek tax, legal or other professional advice before acting or relying on any content.

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Start accumulating reward points for simply for collecting and making your business payments. Setting up a B2Bpay account is easy, and free! Click HERE to sign up to make payments for free.

If you are interested in receiving payments and earning Qantas Points, click here to get started. Alternatively, talk directly to our Sydney-based B2Bpay customer support team by contacting us at 1300 205 575.

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Ecre

July 29, 2021 Lauren Jenkins

Ecre, a coffee co-roasting space and learning academy in Sydney, uses B2Bpay to get paid and earn Qantas Points.

Nawar Adra migrated to Sydney, Australia from Lebanon in 2005 and brought with him a love of coffee. “I have been drinking coffee since I was five years old. I love that it is a drink that transcends every culture and brings people together”.

Nawar started his career as a barista, trying to break into roasting. But he struggled to get his roasting business off the ground as good advice was hard to come by and setting up a roastery was a six-figure investment.

In 2016, he founded Ecre, a collective roasting space. Ecre allows other businesses and individuals to Roast their own coffee, for themselves or under their own brand.

“It is very expensive and requires a lot of investment to get the machinery required to roast your own coffee. Not to mention the knowledge required that is very hard to access”. Adra believes that others should save that money and focus on “creating a quality and ethical product instead”. Ecre makes the industry far more accessible by sharing their machinery, resources, knowledge, and love of coffee.

Ecre now has 45-50 individuals and businesses roast weekly at their Alexandria premises. “Ecre is all about creating a coffee community, focused on delivering the tools to help the industry become more environmentally, socially and monetarily sustainable” explains Adra.

Travel is a big part of Ecre’s success. In 2016, during the first year the business was launched they held 55 fun events for the coffee industry all around Australia. This was integral in getting the word out about their business and included flying in well-known people from around the world to speak. Nawar was also a member of the Australian team and participated in the World Coffee Roasting Championships in Taiwan. “Australia is very well known around the world for producing exceptional speciality coffee” adds Nawar.

Adra signed up to B2Bpay to accept card payments on his invoices in 2020 and hasn’t looked back. Ecre uses Xero for their accounting, and Adra found it very was simple to add a ‘Pay with B2Bpay’ link on his invoices. It now costs Adra nothing to receive card payments, and he receives Qantas Points when his customers pay him.

Adra is looking forward to the opportunity to use his Qantas Points to travel again once the borders open. Not only does he want to travel around Australia again promoting good coffee manufacturing, but Adra wants to travel the world “visiting more farms where the beans are grown. And bringing back those stories and knowledge to Australia. Collectively, we have the power to make an impact on the livelihoods of families who produce what we love to drink. That is where my Qantas Points will be used”.

Get Started Today

Getting a B2Bpay account set up is easy, and free! Simply fill out an online activation form so we can verify business details. Then we will quickly set your payment portal and payment page, customised with your company brand logo. We will also arrange a payment link on your invoices.

Alternatively, talk directly to our Sydney-based B2Bpay customer support team by contacting us at 1300 205 575.

Earn up to 10,000 bonus Qantas Points when you pay your ATO bill through B2Bpay+

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Adding a Payment Account in Xero (to receive payments)

July 14, 2021 Jane Grant

Adding a Payment Account in Xero (to select when configuring in B2Bpay)

Some of our customers come across an issue when they go to select the “Payment Account” in B2Bpay, and there is nothing there to select (see example below). If this is the case, you will need to go in to your Xero Account and add a code to your Bank Account (where you receive funds) or add a bank account with a 3 digit code. Follow our step by step instructions below to get this configured.