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 a 23% deterioration in the improve 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.
It has become essential for SMEs and other businesses in UAE to digitize the accounting system and gain a competitive advantage through automation in this post-pandemic era of digital disruption. An efficient Fintech can do the best with respect to digital wellbeing in UAE and improve working capital management. Hylobiz, a business-centric Fintech offering innovative and automated features through connected banking and connected ERP ensures cheaper, faster, and easier access to improve working capital.
Benefits of efficient working capital management:
Working capital management is the strategy to monitor working capital and should be well planned by managers and responsible teams.
- If working capital is managed efficiently it may ensure cash liquidity by efficient monitoring of
- accounts payable,
- accounts receivable, and
- management of stock and debt.
- It enables a business to pay out to vendors on time and increase production.
- Efficiently managed working capital improves the financial health of a business and can increase profitability.
- A good working capital level helps businesses to 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 to digitize and record, track, and manage financial data and transactions accurately. The platform is pre integrated with Tally, ZOHO and Quickbooks. The Real time dashboard helps monitor receivables and payables accurately and help analyse the current assets and liabilities.
- 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. It reduces cost of business operations and accounting and the makes sure there is no expenditure on paper, printing, and mailing.
- Automate invoices and payment collections to get paid faster. Hylobiz helps to create, upload, and send out branded invoices through WhatsApp, SMS, and Email. You can send payment collection links through WhatsApp, SMS, and Email and receive payments in multiple modes via Debit/ Credit cards and Net banking. Quick settlements, automated reminders and automatic invoice reconciliation on real time enables you to avoid manual error, get paid on time without a miss and you enjoy better cash flow to spend on potential expenses.
- Pay out on time. The integrated payment gateway on Hylobiz platform allows you topay out digitally singly or in bulk to vendors/ for utilities/ to employees as salary and many more. You need not pay extra for late payments. If days payable outstanding is reduced and payables performance is improved, working capital level boosts up.
- 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. As you get paid on time, you can utilize the money to buy goods from suppliers thus getting rid of the hassles of outstanding collections and payments. You can save company money while you free up your employees from disputes.
- Avail loans. You can always find a steady flow of cash with SME working capital 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 (outstanding invoices yet to be paid by customers). The real time dashboard and automated reports on Hylobiz platform display 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.
An SME business or any other business in UAE can access all the Hylobiz features over the web (Sign up for free) and the mobile app (Download the app: Android and Apple store) to improve your business working capital. Interested to connect? Ask for a free demo. Email: email@example.com