It wasn’t so very long ago that firms were reliant on physical payments or checks to receive money from clients – often leading to unwanted and unnecessary delays in getting paid. However, with the tremendous advances made in recent years in banking systems, the web, and tech, we now live in an era of instant payments, online banking, and virtual transactions that could transform the financial fortunes of your firm and make your company more dynamic and proactive to changing market conditions.
The concept of money and how it’s changing – yet staying essentially the same
At its core, money is purchasing power – a way of storing value. In fact, when you look at it, in the times before bank-issued notes and coins, ‘money’ could have been anything from a hand-crafted ornament to salts purchased from a trader. In its most basic sense, money can be seen as anything that has an inherent value that can be traded against another commodity of value – or, in other words, something that gives the owner bargaining or purchasing power.
Digital currencies and bitcoins
In its most recent incarnation, we’ve seen the emergence of money in the form of bitcoins – which are, in essence, a type of cash tokens released by a firm to represent the value of goods or services it provides.
In many ways, it should perhaps come as little surprise that the world is moving gradually away from the concept of physical notes and coins. As we invest more and more of our personal and business data in online systems, it would seem only logical that we should do the same with our finances.
Moreover, when you consider it’s estimated only around 8% of the world’s supposed ‘money’ actually exists (the rest is just a string of numbers held in databases), moving to a digital economy would appear the next reasoned step.
How digital money could help streamline your business
Aside from just the sheer convenience of not having to handle real-world money, there are also several considerable advantages to moving to online accounting and digital payments, including (but not limited to):Speed: One of the most common problems previously faced by businesses was cashflow issues – often caused by not being paid on time. By moving to digital payments, you’ll remove the opportunity for clients to pay late, improving your overall finances.
Flexibility for firms: Rather than just accepting payments in cash or via check, there is now a huge number of options for businesses to get paid by customers – everything from online-only banking platforms to cellphone NFT payments, bank transfers, and apps like Square that can gather payments.
Flexibility for clients: Tied to the above, by giving your clients a range of ways to pay you, you’ll also make their lives easier. The bottom line is if the payment process is simpler, customers will be more likely to pay on time.
The automation of accounts: The days of paper-based accounting ledgers are, thankfully, mostly long gone, but by moving to digital payment systems, you’ll also be able to benefit from the massive range of new artificial intelligence (AI) accounting systems that can automate the majority of your invoicing and payments processes.