Managing cash, which includes cash withdrawal, cash deposits, and cash flow in a small business is a breeze when you go cashless with InstantPay.

For small businesses, it is significant to minimise accounting efforts to concentrate on business development. Maintaining cash can be a challenge. Small businesses need to turn away from using cash to divert their efforts towards growth.

Here’s an example that explains the challenges small businesses can face while using cash:

managing cash in a small business
Managing recurring payables and receivables in a small business

Nitin runs a hardware store. He has rented a premise, and he relies on credit from his bank to pay for the purchase of goods from wholesalers. 

He has a staff of three employees. Most of his customers consist of local carpenters, interior designers, civil contractors and plumbing contractors. Some customers buy hardware goods from his store and pay him right away, while others source goods from his store on credit as they commence a job and pay him later after they get paid for their work. 

His Payables are Purchases, Interest, Rent and Salary, among others.  

His Receivables are Collections on billed or invoiced orders. A significant chunk of his sales are on credit, and their payment date is often unpredictable and prone to unforeseen delays.

How should Nitin manage his cash flow in a business?

Nitin usually disburses his payables on time. He wants to ensure that his business is profitable in terms of margins. However, his receivables always come in later than he would like. 

One of the most important criteria in managing cash flow in a business, i.e. managing all the payables and receivables, is to ensure that a business should always have sufficient liquidity to function efficiently. But this seems to be a more daunting task in practice. 

He sometimes has to resort to short term loans or overdrafts from the bank to bridge the gap between his payables and receivables.

The Task of Physically Managing Cash in a Small Business

The physical management of cash also poses a challenge, as he has to take care of cash withdrawal and deposits from time to time. For this, he has to visit his bank branch often. This is both inefficient, unsafe and time-consuming.

Examining the Dilemma of Cashless vs Cash

Rameshbhai, a fellow shopkeeper suggested that Nitin should go cashless with InstantPay. However, Nitin was sceptical at first. After all, he was doing business in cash for years and was used to it.

Then, Rameshbhai explained to him that if he goes cashless with InstantPay, it solves the problem of security as he does not have to handle cash. 

Additionally, it will help Nitin save a lot of his time, which was earlier spent at the bank branch for cash withdrawal and deposits purpose. 

cashless vs cash, go cashless with InstantPay

However, the clincher was when Rameshbhai demonstrated the virtual finance dashboard that was available on his mobile. It instantly displayed all the inflows and outflows from his account visually in one place.

Also, the mobile app facilitates instant loans and overdrafts from the bank if needed. Nitin could easily understand that this is the tool he had been wanting for managing cash flow in his business. 

Today, Nitin is much happier as the InstantPay mobile app has addressed his cashflow worries. Furthermore, his physical cash management needs can be fulfilled by the nearest Digi Kendra. He also uses QR code scanning using InstantPay mobile app at the store. 

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