Running your business cash only has become outdated very quickly. The world is becoming increasingly more digital to the point where remaining cash based could be detrimental to growth. By converting your invoicing and bookkeeping systems to a digital system is now essential, providing businesses enhanced security and efficiency.
1. Electronic systems don’t cost more
Many cash only businesses believe that they save money on tax, software and transaction fees. The ATO found that one in five of these businesses gave cost as the reason for not transitioning to electronic systems.
What these businesses ignore is money lost by having cash only systems. Electronic systems save an immense amount of time. They are fast and efficient allowing your staff to spend more time improving the business than worrying about cash or physical bookkeeping. Tap and go payments are actually twice as fast as cash and can save the business an average of nine cents per transaction.
This doesn’t even add in the fact that many potential customers will simply refuse to shop with you if you do not offer digital payment options. Cost is no longer a restriction.
2. Digital is essential for business growth
Continuing the expectations customers have on businesses now is the amount of growth you could miss out by not taking advantage of the many platforms digital offers. Many customers expect to be able to be able to use tap and go as a minimum, and some even expect services like Apple pay or Android pay to be available as well. Digital wallets are becoming the norm, if businesses do not support them, they could be missing out on a lot of customers into the future.
Then there is online shopping. Your main revenue stream may come from your physical store but diversifying these channels is always a positive. These could allow you to offer services like AfterPay and shipping to locations that are further away. This opens your store to customers who may not have previously had access to your products.
3. Your competitors are already digital
80% of people conduct research online before purchasing a product. If they find your competitors before you, and they are taking advantage of relevant digital platforms, they are going to get the sale before you have a chance.
Having a solid online presence through a website, Google My Business, or social media can help. But taking that further with online payment, enquiry, or shopping options could potentially leave you getting those sales you otherwise would have lost to your competitors.
4. It is easier to manage your finances
Digital payments offer better efficiency, improved security, and better record keeping, especially when combined with a digital bookkeeping software like Xero. The ATO found that businesses who took advantage of electronic systems found these benefits.
These benefits could transform your business’ entire record keeping and bookkeeping process. Come tax time you will no longer have to sift through physical receipts allowing you to easily keep track of your financial position. It is much easier to do when your records are neat and tidy digital files.
Your business will also see better planning driven from new data available in real time at your fingertips. Cashflow management will be come increasingly easier, as will streamlining business processes.
5. Your customers will trust you more
ATO research discovered that most Australians have a negative opinion on cash only businesses. They consider them inconvenient and question their honesty. While most cash based businesses are doing the right thing and declaring their income accurately, this is still a negative stigma that no one wants associated with their business.
6. The ATO will trust you more
The ATO has a lot of data at its fingertips allowing it to compare your business with others. If it is finding any wild variations in the reported income and expenses, they will raise a red flag. While this isn’t necessarily a problem for most businesses, if it is because of a loss some businesses will be able to forward that loss and claim a tax deduction for it in the future. Cash only businesses will have to prove that the loss is legal, which is more difficult when you are dealing with cash, to get these deductions.
7. It is really easy to switch
Switching over to an electronic business is easier than ever for cash based businesses. There are many bookkeeping services who help many customers transition their business smoothly onto digital systems. Link Strategies regularly works with small businesses to help them take advantage of systems like Xero to dramatically improve their bookkeeping. If you want to grow your business talk to Link Strategies.