Smaller businesses continue to struggle managing their cash flow and payments, according to studies. Research conducted by WePay found that 41% of businesses reported that they experienced challenges to do with their cash flow 16% reported of experiences with payment fraud. This is all just in the last year.
In the UK, research shows that cash flow problems have actually had an effect on a huge four in ten small business over the last two years. It was found that the firms which were most affected were those operating in the North East of England due to the lack of sufficient funds running through a company.
Cash flow seems to have a major impact on businesses which are smaller in size. 59% of the businesses which were surveyed said that the financial impact is consequential due to an unforeseen circumstance or expected expense.
This has led to an unprecedented rise in small businesses and consumers looking for finance online, something that has lead the UK government to launch a new £15 million fund to help small businesses. (Source: Choose Wisely)
It is also troubling that may small businesses had reported multiple attempts of payment fraud, something that has cost the UK economy over £38 billion per year.
Fortunately, in 2018, there are a range of financial technology products available to help small businesses with cash flow and invoicing.
On a global level, companies such as Stripe and Xero offer efficient automated invoicing, allowing better management of payments and chasing up customers for payments. Israel has been no strange to payment software, with Payoneer founded in 2005 and responsible for handling online currency exchange through eCommerce sites such as Amazon and Airbnb. Elsewhere, Zooz meaning ‘move’ in Hebrew enables small companies to accept multiple payment providers through a single platform and enable a quicker payment of invoices and cash flow.
For helping small businesses and freelancers maintain cash flow, companies like Green Invoice in Tel Aviv are able to offer an advance of up to 80% on your outstanding invoices – ideal for fashion companies, food brands and caterers with large orders but a 60 day waiting period for payments. With money upfront and low interest rates, the role of invoice finance plays a huge part in keeping the start-up economy cash positive and is said to be worth an estimated £23 billion in the UK.
For online fraud, Israel’s Forter has recently won the equivalent of an Oscar for fraud protection. The machine learning software analyses thousands of examples of user behaviour to determine whether a website user is fraudulent and using stolen card details. Forter only charges on a ‘win basis’ and will pay the online retainer or small business the damages if a fraudulent customer slips through the net. Last year, the company raised $15 billion through a round of investing which included Facebook investor Sequoia Capital.