Prolonged payment terms can be crushing for small businesses when it comes to cash flow. Thankfully there is an end in sight to this problem: triple entry accounting. Learn more about how this blockchain application can help revive cash flow for small businesses.
How a job well done could result in payment issues.
You’ve delivered the goods and /or services and your customer is very happy and confirms they will pay within 60 days. That is going to cause a cashflow problem for your business as you have creditors to pay, costs that you incurred delivering the order. Financially, you’re not able to wait for the payment to come through.
You first contact your bank to apply for a short-term loan but all you get is a load of inconvenient questions and form after form that need to be completed. A task that takes time you probably don’t have as a busy business owner and which still leaves you playing the waiting game. How is it that a copy of your invoice and your customer's word is not a sufficient guarantee or evidence to have the loan approved?
The problem with trust and reciprocation
The honest, whilst sounding cynical, is people naturally distrust each other. In science, this phenomenon is referred to as ‘the problem with trust and reciprocation’. The issue at hand is so significant that there was a Nobel Prize awarded to the person that wrote about the problem, without even coming up with a solution!
The solution to this problem is due to blockchain technology. Or better still, an application that Exact is currently working hard on: triple entry accounting. This will make the entire paperwork that the bank requires superfluous.
The principle is simple. The invoice that you send your customer from your accounting software will automatically upload to a blockchain as a locked file. This irrefutably proves that you sent the invoice. When your customer accepts the invoice (and thereby agrees to the amount due), the same applies.
If you grant your bank access to this information, this will be sufficient for them to approve the loan. The bank knows that you are good for the funds and that you can pay the loan back once your customer pays the invoice. No more tedious paperwork, no more cash flow problems, just instant reliability (and a little bit of breathing space).
Triple entry accounting
Exact are working on development of triple entry accounting to ensure that you never have any more cash flow problems. They are working on this in collaboration with other parties, namely banks and the government. Even though we all wish the solution could be made available to us yesterday, rest assured that Exact are seriously working around the clock to solve this issue.
What software solutions can Exact offer your business:
Exact off an all-in-one online integrated business solution specifically designed for SME’s:
- Wholesale Distribution
- Professional Services
Each one of these solutions include Accounts and CRM - all in the Cloud
In addition to the forthcoming benefits of triple accounting, Exact also offers the following benefits:
- Automate everything with 1 flexible online subscription
- Work together for the best results
- Make better decisions with 24/7 online insight into all business data
Who is Elementary Business Solutions?
Elementary Business Solutions is an Exact Certified Partner, our technical business consultants have all been through the rigorous certification programme to ensure that they not only understand the Exact software solutions but, also understand how it can help your business reap the benefits.
What makes Elementary Business Solutions different?
Whether it’s Exact for Accounting, Time & Billing, Project Management, Wholesale Distribution or Manufacturing, the transition from implementing your new software to establishing a process where you are confident in being able to use it is crucial. We will work with your company and act as problem solvers, trainers and mentors to ensure your business reaps the benefits that your all-in-one integrated software solution can provide. We put in place the tools that will deliver lasting change and equip your business with what it needs to grow. This in turn will provide your business with a more efficient process of working, allowing you and your workforce to focus on the more important tasks at hand.