SME businesses in UAE saw a steep fall in cash flow with COVID 19 pandemic. According to a study done by PWC (https://www.pwc.com/m1/en/publications/working-capital-2020.html ), in the first half of 2020, there was 23% deterioration in the average working capital performance of surveyed companies.
What were the key drivers affecting the working capital of SMEs during the pandemic?
· Collection of payments were delayed due to lack of technological and digital back up,
· Increased expenses to manage human resources on remote working mode, for supply chain disruptions, paid subscriptions to multiple ERPs, high transaction costs on payment gateways and losses due to error in manual data entry.
Benefits of efficient working capital management:
· ensure cash liquidity
· pay out to vendors on time and increase production
· improves the financial health of a business and can increase profitability.
· manage operational expenses and deal with short term debts.
What is working capital?
Working capital= current assets- current liabilities
Tips to improve working capital
Digitize your entire accounting process and monitor the payables, receivables regularly. With Hylobiz, you can seamlessly integrate the business tools/ ERP. The Real time dashboard helps monitor receivables and payables.
Reduce cost. Hylobiz is a plug and play portal, with Nil set up fee, NIL integration, NIL monthly cost. The lifetime free subscription and low transaction cost on the platform makes it highly affordable.
Automate invoices and payment collections to get paid faster. create, upload, and send out branded invoices through WhatsApp, SMS, and Email. You can send payment collection links and receive payments in multiple modes. Quick settlements, automated reminders and automatic invoice reconciliation on real time enables you to avoid manual error.
Pay out on time. The integrated payment gateway on Hylobiz platform allows you to pay out digitally.
Make sure you maintain good relationship with clients and suppliers. The automated reports help avoid disputes and you get a chance to maintain better relationship with professional email templates.
Avail loans. The connected banking and connected ERP enables Hylobiz to provide invoice discounting and loans. Invoice discounting allows you to avail loan against accounts receivable. The real time dashboard and automated reports shows the accounts receivable status which can be used as collateral for availing loans from any Bank or NBFC. The automatic reconciliation and transaction history can help to establish your business is running healthy and helps to get loan.
Read the blog originally published at : https://hylo.biz/6-ways-to-improve-working-capital-hylobiz-can-help-sme-businesses-in-uae/