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Artificial quality (AI)-fueled superior financing level CredAble connected Thursday (Nov. 11) introduced UpScale for micro-sized, tiny and medium-sized businesses crossed India, according to a Mint…

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Artificial quality (AI)-fueled superior financing level CredAble connected Thursday (Nov. 11) introduced UpScale for micro-sized, tiny and medium-sized businesses crossed India, according to a Mint report.

CredAble handed retired astir 3,500 crore successful loans to much than 100,000 tiny businesses past month, per the report. The UpScale recognition and currency travel absorption app volition beryllium utilized to propulsion deeper into the fiscal ecosystem with a suite of solutions for tiny concern owners.

"Due to breached fiscal manaement, lone 16% of MSMEs person entree to ceremonial credit, creating a spread of $350 billion," said Nirav Choksi, CredAble co-founder and CEO, successful the Mint report. Thus, it is important that MSMEs negociate their finances amended and standard faster.

"With UpScale, our purpose is to make inclusive maturation for tiny businesses by providing them with currency management, payment, recognition and maturation tools that volition alteration tiny concern owners to efficiently turn and negociate their businesses," helium said.

CredAble precocious brought successful $30 cardinal successful Series B funding, which it is utilizing to broaden its scope and adhd caller solutions for tiny businesses done UpScale, which syncs with a business' existing accounting bundle and slope accounts to supply real-time data.

"This is an all-in-one recognition and currency travel absorption app that provides a elaborate yet intuitive look astatine the full fiscal presumption of a business," said Nitin Sharma, main merchandise serviceman and managing director, successful the Mint report.

"It helps successful bridging the spread betwixt fiscal operations and fiscal reporting, thereby allowing the concern proprietor to marque informed fiscal decisions astir the business. Besides, UpScale helps automate recognition and currency travel management."
Related news: Buyer 'Anchors' Are 'The New Oil' for SMB Supply Chain Financing successful India
CredAble Executive Vice President and Head of Credit Ranjit Singh told PYMNTS CEO Karen Webster earlier this twelvemonth that India's SMB abstraction is hampered by constricted entree to reliable recognition sources, meaning galore smaller suppliers conflict to fulfill ample orders.

Singh told Webster that bigger businesses, which helium calls "anchors," tin assistance their suppliers get the financing they request and that they volition beryllium motivated to enactment with CredAble. Most of CredAble's concern has been anchor-driven, helium noted.

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CredAble Debuts Credit and Cash Flow Management App for SMBs

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Artificial quality (AI)-fueled superior financing level CredAble connected Thursday (Nov. 11) introduced UpScale for micro-sized, tiny and medium-sized businesses crossed India, according to a Mint report. CredAble handed retired astir 3,500 crore successful loans to much than 100,000 tiny businesses past month, per the report.

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AI-powered technology platform CredAble has launched UpScale,a credit and cash flow management app enabling growth for SMEs in the country…"

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AI-powered technology platform CredAble has launched UpScale,a credit and cash flow management app enabling growth for SMEs in the country. "UpScale connects with the existing accounting software of the business, syncs in transaction details, connects with bank accounts and credit bureaus and gives instant access to working capital with the help of partnering financial institutions," it said in a statement.

Nirav Choksi, Co-founder and CEO, CredAbl e said, "Due to broken financial management, only 16 per cent of MSMEs have access to formal credit, creating a gap of $ 350 billion. It is important that MSMEs manage their finances better and scale faster."

Source: The Hindu

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AI-powered technology platform CredAble has launched UpScale,a credit and cash flow management app enabling growth for SMEs in the country. "UpScale connects with the existing accounting software of the business, syncs in transaction details, connects with bank accounts and credit bureaus and gives instant access to working capital with the help of partnering financial institutions," it said in a statement.

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If you ever wondered about why many small businesses fail to grow then cash flow management is what you might be looking for. Before we dive deep into the intricacies of the subject, let’s have a look at if history has a lesson or two for us in its books.

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If you ever wondered about why many small businesses fail to grow then cash flow management is what you might be looking for. Before we dive deep into the intricacies of the subject, let's have a look at if history has a lesson or two for us in its books.

Did you know ' Kushim ' is the earliest recorded nam of a person in human history? In fact, the name appears in 18 separate clay tablets used to record transactions of barley. But are you wondering who Kushim was and why was he so important that his name was engraved on those clay tablets?

Interestingly, Kushim was an accountant in Sumer which is one of the earliest known civilizations in the historical region of southern Mesopotamia, modern-day southern Iraq. The next big question is why it had to be the name of an accountant when there were other much more renowned people and professions?

The answer to this is very simple: in order to maintain and successfully run a larger kingdom, someone was needed to keep a record of all financial transactions taking place and such was the importance of an accountant.

Similarly, to run, maintain, and grow a successful business, we need to maintain a proper flow of cash coming in and going out, so that the business does not fail due to the lack of cash on hand.

Think of cash flow like the blood flowing through your veins, if that flow is interrupted, the heart stops functioning and everything else along with it - so understanding and maintaining cash flow is an integral part of any business.
What is cash flow?
Cash flow is the net of the cash that comes in and goes out of a company during a specific time period. What it means is, if the money that is coming in is more than what's going out, then it's a positive cash flow, which is good for your business.

If the money that is coming in is less than the money that is going out, then that's a negative cash flow and not at all good for your business if it continues for a longer period of time.

Remember that cash flow management is different from profit & loss, and balance sheets but is an important aspect in determining the company's financial health.
Why does calculating a company's cash flow management matter?
Positive cash flow is when the money that comes in is more than the money that goes out of the company. Negative cash flow is when the money that comes in is less than the money that goes out of the company.

It's a break-even point when the money that goes in and comes out of the company is the same for a specific period of time.

However, to run a thriving business and avoid being on the verge of survival, a company needs to keep its cash flow positive.
Probable consequences of break-even point cash flow or negative cash flow over time are:
-Lenders or investors could conclude that your business does not provide enough income to support

the business, thus, isn't thriving.

-It could cause dealing with a crisis like missing or delayed payroll, rent, loans, and taxes.

-It could affect your business due to missed supplier payments.

-It could jeopardize your situation while trying to buy inventory, capital assets and equipment, advertise, and expand your operations to grow your business and instead be forced to sell them to increase liquidity.
Upsides of keeping a positive cash flow:
-It puts your business on a growth trajectory and gives you the leverage to think strategically, take calculated risks, and plan ahead.

-It helps you attract investment and retain talent.

-It allows you to address problems and inevitable situations, quickly and with ready, available capital.
What causes companies to fall into the loop of negative cash flow?
They say, prevention is better than cure, and we couldn't agree more in this situation - so, if you get to understand cash flow then you can avoid getting into a situation where your company is trapped into a negative cash flow. Here are the pitfalls to look out for:
a) Negative cash flow due to late payments
When the amount of money that goes out is not the same as that comes in, it creates a cash gap. While you wait on your invoice payments you don't have cash available to fund business activities.

Late payments are one of the biggest reasons why small businesses operate with a negative cash flow most of the time. To prevent this, you could choose to go with business credit bureaus that are collecting information on companies all over the world and could warn you in real-time.
b) Negative cash flow due to payment terms
Payment terms define your customers how long they have to pay your invoice. "Due On Receipt," or an extended period of credit to your clients with Net 30, 60, or 90 days or even longer are some of the common payment terms in function.

Think of it like, you prepared and delivered goods to a company that's your client but the payment terms you have with that company define and allow it to pay for the goods within 30, 60, or 90 days after the delivery has been done by your side.

In this case, you would have paid for the production and delivery of the goods from your pocket and will still be waiting for the payment from the client for the next few months.

During this period you will not have the free cash flow to smoothly run your business activities unless you solve that negative cash flow issue.
c) Negative cash flow due to lack of cash flow forecasting
If your company fails to conduct regular cash flow analysis and cash flow forecasting, it is very likely to fall into a negative cash flow trap. Learning about them can help you navigate through this journey better:
Cash flow analysis
Cash flow analysis can be done by analyzing the cash flow statement which can be prepared in MS Excel or through cash flow management software. Although, the former is a manual process hence more prone to error. In cash flow analysis, the net income for a certain duration of the past is distributed across three categories: cash provided by operating activities, cash provided by investing activities, and cash provided by financing activities.
Cash flow forecasting or cash flow budgeting
Cash flow forecasting helps a company estimate their cash receipts and expenditures for a specific period of time in the near future. It can warn you of any case of a negative cash flow situation in the near future so you can proactively respond with a cash flow solution to prevent it.
How to manage cash flow better?
-Conduct regular cash flow analysis

-Prepare monthly or even weekly cash flow forecasts.

-During times of negative cash flow crisis, look for an immediate injection of cash through the means of invoice funding, invoice factoring, or sales invoice discounting.

-Opt for microfinance such as Buy Now Pay Later that offers flexibility in terms of the payment schedule and a lack of formal credit.

-Apply for Working Capital Term Loans to fulfil short-term operational needs.

-Require clients to make partial payment in advance for larger orders

-Negotiate with vendors and suppliers to grant 30-day terms or even 60 or 90 days.

-Avoid delay in payment by reducing billing errors and confusing invoices.

-Create a credit policy that clearly defines your billing terms, interest charges, acceptable payment forms, and credit check process.

-Avoid paying fines or accruing high interest on business credit card balances by paying it on time every month.

-Consider generating cash by selling assets by carefully measuring the impact of the move on the business growth.

-Maintain a good relationship with your bank and only use overdrafts for short-term cash requirements.

-Employ cash flow forecasting software that uses data from the accounting platform and helps reduce the manual work of inputting data.
How is cash flow different from profit?
A negative cash flow does not imply the company is in loss, what it implies is that the amount of money coming into the company is less than the amount of money going out for a specific period of time.

For example, suppose your company has INR 3,00,000 in outstanding invoices due for payment on the 18th of the month, but you need to pay your suppliers INR 1,50,000 by the 8th of the month. Now even after having more money in receivables than in payables, you simply won't have the cash to pay your supplier on time.

Here the company isn't at loss financially, as the net payment leads to profit eventually but it still suffers from the negative cash flow.
How is a cash flow statement different from budgeting and balance sheets?
A budget states the amount of money you can spend over a period of time, given your assets and liabilities, and revenue. Your company's balance sheet is a statement of your liabilities, assets, and capitals at a specific point in time.
Is cash flow management any different for a large corporation and a small business?
A large corporation can withstand longer periods of negative cash flow from operations due to the availability of greater liquidity and reserves. A small business often relies on free cash flow across investments, operations, and financing and thus can not survive on a negative cash flow for a long period of time.

Understanding the fundamentals of how cash flow management works and getting actionable in practice can save a company from reaching a situation of "do or die," after all, nearly 27% of startups fail at the hands of a poorly managed cash crisis.
What can small businesses do to manage cash flow management in a better way?
To solve the cash flow management issue for small businesses, it is really important to understand the nitty-gritty of businesses dealing at such a scale, their limitations, liquidity, and expertise available to them.

To make it less cumbersome for small businesses, a unified cash flow and credit management system by UpScale is one such promising solution. It has been designed by a team of people who understand the real pain points of a small business owner and what sacrifices and costs it takes to build a business from the ground up.

We at UpScale believe that for a business to thrive, credit & cash flow challenges need to be solved simultaneously. With UpScale, businesses can now generate real-time business insights and get instant and collateral-free business loans.

This makes it the only platform a business needs to get better & complete visibility of their finances, have better control of their operations, and access to instant business credit to achieve better growth.

Sign up and explore how UpScale can take away all your headaches related to cash flow management and help you focus on your business growth.
Conclusion
It has been studied that the number one reason small businesses fail is due to poor cash flow management skills or poor understanding of cash flow management.

In fact, 82% of small businesses face cash flow management problems. If done correctly, a business just doesn't learn how to manage a crisis but also thrive.

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The ultimate guide to cash flow management

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If you ever wondered about why many small businesses fail to grow then cash flow management is what you might be looking for. Before we dive deep into the intricacies of the subject, let's have a look at if history has a lesson or two for us in its books.

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Many kingdoms, businesses, and people have come and gone from this planet but there is one major thing that has remained constant in the success and failure of these entities, which is cash flow!

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Many kingdoms, businesses, and people have come and gone from this planet but there is one major thing that has remained constant in the success and failure of these entities, which is cash flow! It's the story of how well someone manages money. If you have learned it well, you will thrive and if you haven't, you will falter.

Now, success and failure are subjective ad vary from person to person but when it comes to an organization or a corporation, it becomes a group of people who are there to make good money. When that happens then this complex system behaves much like an organism.

Therefore, one could say that an organization is much like a constantly changing living organism. To keep an organism healthy, you need uninterrupted blood flow to the heart, similarly, to keep an organization thriving, you need a proper supply of cash flow in place.
Before we dive deeper, let's surf the waters near the shore
Cash flow is the cash or its equivalent that's coming into and going out of your small business. If the net of this is positive then it means that the cash that is coming in from customers and clients is more than the amount going out for expenses. If the net is negative, then your business could be in trouble.

Remember, 82% of small businesses face cash flow management problems. If you fail to manage your cash flow within the first year, you might not survive past the second year.

Now cash flow management is basically about improving your receivables, managing payables, and surviving shortfalls. These same parameters also help you make your monthly or even weekly cash flow analysis. Here are a few important tips that would help you sail through the turbulent times -
1) Measure cash flow regularly
Use a free cash flow worksheet template to keep a tab on the cash coming in and going out of your business or make use of free accounting software like Wave or GnuCash. Repeat this process monthly and if you can, do it weekly. In a matter of a few repetitions, cash flow analysis will feel like second nature.
2) Get paid on time
One of the best practices for your business would be to train your customers to pay you on time. Reduce the friction by one-click payment options and automate payment reminders with online invoicing software like Invoice Ninja or Due.

3) Keep your cash working

The longer the payment cycle you can negotiate with your supplier, the longer your cash is available and earning interest. Remember to keep your cash in an immediate-access account and not where there is a locking period CD bond of a 30-days or 60-days.

Though the breakeven point is a different story from cash flow analysis, it still gives you an idea of how long it will take you to reach profitability. Negative profits and negative cash flow is the recipe for an ugly situation in business.

You can determine the breakeven point by either doing a unit-based or Rupee-based breakeven analysis. Revenue per item sold, the variable costs for each item and fixed costs like rent or utility bills should be used while determining the breakeven point.
5) Be smart with your payroll
Have a payroll account and transfer the funds just before paying salaries. This way your cash stays in an interest-earning account for a longer period of time. Another tip is to run the payroll on a bi-monthly cycle instead of a bi-weekly basis, saving you the admin cost for extra two cycles.
6) Manage your inventory better
If possible, have complete control over the manufacturing process by incorporating models like Just-in-Time Inventory management and tools that could help free up cash involved in the tangible objects.
7) Tighten your credit requirements
As most financial institutes do, tighten your credit requirements when offering credit to the customers. Look for a reference check for potential falters with the help of local vendors or go for a full report on your clients with the help of major consultancies.
8) Securing loans
To prepare yourself for the negative cash flow crisis apply for Working Capital Term Loans to fulfil short-term operational needs.

For immediate injection of cash, consider invoice funding, invoice factoring, or sales invoice discounting. Opt for microfinance such as Buy Now Pay Later that offers flexibility in terms of the payment schedule and a lack of formal credit.
9) Get creative with incentives to customers
It's a no-brainer in business to boost sales by offering creative incentives to customers. You can choose to sponsor a contest or host an appreciation event. Whatever you do, remember that while increasing sales you have actual cash and not just credit in your accounts receivables.
10) Automate your recurring payments
Set up automatic payments for periodically occurring fixed costs in your business and make use of accounting software to track cash flow across each month. It's wiser to spread your expenses across multiple dates rather than paying it in a lump sum.
11) Be smart with cash outflow
Prefer leasing over purchasing expensive equipment. Barter your way through with customers who are also your suppliers. Go for reconditioned equipment that is in good condition and would work just fine with proper maintenance.
12) Designate a cash flow monitor
If you can have a qualified and trusted person who can keep a check on your cash flow on a monthly or weekly basis then you will be free to focus more on running your business than worrying about one aspect of it.
A few more things to keep in mind to better manage cash flow - 1) Maintain a cash reserve
Remember to always maintain three to six months of working capital to manage any unexpected crisis. A client who doesn't pay till a sudden emergency date could put you in a troublesome situation.
2) Get your pricing right
If you charge less than the market price, you will be underselling yourself. If you charge too much, you might scare off your customers.
3) Growing too fast
If your business is growing too fast, you might end up not being able to meet customer expectations and thereby damage your relationship with them. Stick to slow, steady growth.
Conclusion
Cash flow management not only decides if your company will have a future but also if it could survive any present crisis. This is the end of the cash flow story and if you get it right, it would definitely be a happy ending and if not, it would be a hard-earned lesson.

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Cash Flow Management Tips to Grow Your Business

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Many kingdoms, businesses, and people have come and gone from this planet but there is one major thing that has remained constant in the success and failure of these entities, which is cash flow! It's the story of how well someone manages money.

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It is said that a business must secure funds before it even needs them. This money could come in the form of investor funding and several types of business loans for small and medium sized-businesses

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3 Types Of Business Loans For SMEs In India

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It is said that a business must secure funds before it even needs them. This money could come in the form of investor funding and several…

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UpScale is India's best credit & cash management platform that provides instant business loans and gives small businesses a chance to grow.

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Best Credit & Cash Flow Management Platform | UpScale

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Jayesh Nagda Global Head - Accounts and Audit, Equentia Natural Resources Pvt. Ltd.

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Best Credit & Cash Flow Management Platform | UpScale

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UpScale is India’s best credit & cash management platform that provides instant business loans and gives small businesses a chance to grow.