Getting money when you need continues to be a problem for many small and medium enterprises (SMEs) in the Philippines. Financial technology (FinTech) companies give you new ways to manage money for your business through software as a service (SaaS). The government supports these companies in general, so that is good news for SMEs.
However, many people are not familiar with fintech. How can these companies help a business go and grow? It can be hard to imagine if you manage your money in traditional ways. Read on to find out how fintech companies in the Philippines or other places can benefit you.
Manage the billings
It is good news if you are dealing with a lot of billings. It means your business is growing. However, keeping up with them will only get harder as your business grows. Fintech software designed to handle all your paperwork can help you cope.
Billing and payment software will handle the processes electronically. Instead of paper invoices and receipts, you get digital files that you can send to your clients. The software automates the ordering and payment processes, keeping records as it goes. You can access them at any time and even generate reports. You no longer need to deal with a mountain of paperwork. In most cases, the software will also give you several payment methods. This is convenient for you and your clients, making the transaction smoother and more efficient.
Ease the cashflow
Many SMEs need to allow extended payment cycles to be competitive. In the meantime, cash is short as you wait for 30 or even 90 days for your invoices to come due. You can get a loan from the bank, but approval usually takes a long time.
Some fintech companies specialize in invoice financing. The company will advance the money owed from your payables (invoices) in as little as five days, and they do not require collateral. The software part comes in processing it. It all happens online, so it is convenient for the business owner.
Of course, invoice financing is not free. Generally, you pay about 4% of the invoice amount for a 30-day term, more if the term is longer. The fee will depend on the fintech company, so make sure to ask before signing up.
The advantage of invoice financing is in freeing up your cash flow. You get less than what you expect from your invoice, but you can use the money now. Some companies offer purchase order financing, which is very similar to invoice financing. The difference is you must pay back the money you advanced once your big order goes through.
Handle the taxes
Small business owners often have a problem with processing their taxes. With so many things going on to ensure compliance for start-ups, the issue is a significant one. You do not want to get in trouble with the tax people. You can turn to a fintech company to handle all your tax requirements for you. The service will handle tax preparations, remittances, and filings, perhaps even keep your books for you. You can do all these things online, including paying your taxes. The extent of the work the company will do for you will depend on your plan.