What does the future of business banking look like?

What does the future of business banking look like?

Reading Time: 3 minutes

 

Everything you need to know about business banking trends and how they’ll impact you in 2022.

Whether it’s innovation in tech, a new digital solution or a banking service, SMEs are typically underserved. That’s changing. With the rise of fintechs revolutionising the consumer space, it’s only a matter of time before businesses benefit – and it couldn’t come sooner. Let’s be honest, how easy is it to apply for funding from your current bank and how efficient are they at providing cutting-edge payment solutions?

With disruption finally happening in the SME space, the future of business banking is taking shape. Here are 2022’s top three business banking trends that’ll help future-proof your business: 

  1. Digitisatalisation  
  2. Real-time data
  3. Turning to Fintechs for small businesses lending 

Digitalisation

As an SME, you’re kept busy and unless you have a team of accountants on hand, you need tailored tools like cash flow management solutions and integrated bookkeeping services to make managing your finances easier. You could also do with a lot more transparency when it comes to your credit history. That’s where the digitalisation of business banking is changing the game by making these value-adds not just accessible but a table stake. And cash flow management isn’t the only thing banks and fintechs are revolutionising. Easy online account opening and self-service is streamlining business account management, swapping tedious queues with DIY efficiency to reduce the time you spend waiting and the weight on customer support. Here’s a recap:

  • Bank accounts are moving towards a quick and easy online opening;  
  • 24 hours access to banking with self-service functionalities;  
  • Enhanced security with tools like two-factor authentication;
  • Simplified payments for recurring bills and payroll, categorisation of expenses for ease of tracking. 

 

Real-time data 

Business banking is being enhanced by real-time data analytics and this is a trend that’ll continue to grow. With big data and artificial intelligence in the mix, banks and fintechs will be able to perform intuitive analysis during transactions to get greater customer insights. Great for them, but what does it mean for you? Think, improved loan rates and faster credit scoring. In short, faster more affordable access to funds.

And they’re not stopping there. Further financial technology set to enter the mainstream includes financial aggregation platforms. Whether you have an established business or a start-up, these are beneficial because they combine account data from different sources into a single real-time view. Meaning, you can link your accounting software like SAGE or Xero to your existing business bank accounts and track and manage your entire cash flow in one place.

 

 

Related: The Guide to 2022’s Most Important Trends for SMEs

 

Turning to fintechs for small business lending 

 

Emerging fintech lenders are changing the landscape of business banking, helping SMEs who were once declined due to creditworthiness. As innovation optimises the borrowing experience and access to data results in better business decisions, fintechs are stepping in and offering tailored financial services. Yesterday, the world consisted of stringent credit history assessments. Today, it’s more about assessing your actual business performance. Added to that, funding applications are increasingly digital with a big emphasis on ease made possible with functionality like linking accounts as a way to share transaction history. 



Essentially, the future of business lending is looking very bright. Finally. Considering the contribution of SMEs to our economy, it’s crucial that they – that’s you – get the support you need to succeed. And with technology switching things up and fintechs closing the gaps, you can expect more streamlined services that’ll help simplify the way you manage your finances, so you can run your business better.

 

3 Tips for SMEs on filing their business taxes

3 Tips for SMEs on filing their business taxes

Reading Time: 3 minutes
Filing business taxes can be a time-consuming task. With the tax season underway, we have some advice on how you can get your information in order and get ready to file.

With SMEs gearing up to recover from the economic blow brought on by Covid strains and strict lockdown measures, it’s important to get tax filing right to avoid penalties and possibly save money. While it’s not always easy to stay compliant, SARS has tried to digitise most of its services. Allowing businesses to file online through eFiling, make internet bank transfers, review their tax status and pay SARS online for free and at any time. 

 

Streamline your tax filing with these top tips:

  • Work with professionals
  • Lean on technology
  • Become tax-efficient


Work with professionals

Trying to save money by submitting your own tax returns might sound like a good idea at first, but remember that there are trained professionals who better understand the ins and outs. Rely on them so that you can focus on what you do best (and love the most) which is running your business. In many instances, they’re able to help you save on more than you had initially considered, by noticing where you can get valuable refunds. Doing your taxes yourself can lead to costly financial mistakes that can be avoided when commissioning an accountant or tax consultant.

Bring in a professional as early as possible for timely submission and be sure that your registered details are correct with SARS. Incorrect details can lead to unnecessary penalties.

 

Related: Tips for the 2020/2021 tax season

 

Lean on technology  

Digital developments are continuously changing the game. Automate processes by using the right technology to minimise the stress of tax submissions. Invest in a cloud accounting platform SAGE or XERO to manage and see your finances in real-time and to collaborate with your accountant throughout the year. New technologies make the manual process quick and simple for small firms.

 

Become tax-efficient  

Having well-rounded knowledge of your tax risks gives you the opportunity to understand the tax implications of daily transactions. For instance, managing cash flow to accommodate taxes payable throughout the financial year can help you avoid penalties, interest, and other unexpected consequences along the way.

Other advantages of becoming tax efficient include knowing which exemptions your business qualifies for from SARS, depending on the size and annual turnover. 

 

 

 

Related: Tax Tips for SMEs from a professional tax consultant

 

Continuously monitoring activities and making sure that tax is paid regularly while ensuring that returns are filed on time, helps business owners avoid fines from SARS.

This year, we’re aiming to make your money matters as simple as possible. Keep up with our latest cash flow series in collaboration with Dough Getters Accounting on our social media channels. You can ask your burning tax questions and we’ll do our best to deliver the answers you need. Follow us on Twitter, Instagram, and Facebook for more.

 

The Guide to 2022’s Most Important Trends for SMEs

Reading Time: 3 minutes

 

The latest guide in our Business High Five series, The Guide to 2022’s Most Important Trends for SMEs, is an overview of trends that will likely impact businesses in 2022. 

 

Download our complete guide to 2022’s Most Important Trends for SMEs

 

 

In this guide, your SME will be able to make use of insights on the following trends:

 

  • Adapting to E-commerce
  • Embracing Cashless Payments
  • The growth of the Gig Economy
  • Adopting artificial intelligence
  • Keeping up with video marketing trends

 

 

Adapting to E-Commerce 

Online sales still represent an untapped opportunity for many SME owners to attract and retain customers efficiently and at scale. E-commerce has been growing in popularity throughout 2021, due to permanent shifts in our shopping behaviour resulting from the COVID-19 pandemic. This will continue growing in 2022.

The value of E-commerce transactions in South Africa is expected to grow by 150% to R225bn by 2025 thanks to these market shifts. Find out how you can leverage this growth for your business on our latest guide.

 

Embracing Cashless Payments 

Trend in the same direction as your customers and offer them modern payment solutions. While cash flow is definitely king for business, it doesn’t always have to be hard cash. Now more than ever, businesses need to be prepared for cashless transactions. In our latest guide we share popular cashless payment methods to benefit your business and customers. 

 

 

 

The growth of the Gig Economy 

The workforce is constantly evolving and a major trend right now is the growth of freelancers (or ‘the gig economy’ as it’s sometimes known). More people are opting to make a living outside of a traditional 9-5 role and this trend will continue growing. Find out how you can save on overheads by building relationships with freelancers. 

 

 

Adopting artificial intelligence

AI is now available as a service. Making it more accessible to SMEs because they no longer need to worry about developing their own infrastructure to benefit from it. 

AI has a vast range of potential uses, from personalised recommendations to marketing messages to customers and automated real-time responses to queries. Learn more on how you can use this trend to make your services standout from your competitors. 

 

 

Related: The SME Guide to Managing Business Finances over the Festive Season

 

 

Keeping up with video marketing trends 

Marketing techniques are perpetually changing. Keeping up with the latest trends needs to be a priority for you in 2022.

Approximately 84% of people say a brand’s video has convinced them to buy a product or service. While 54% of consumers say that they want to see more video content from a brand or business they support.

 

Download the full SME Guide here.

 

The SME Guide to Managing Business Finances over the Festive Season

The SME Guide to Managing Business Finances over the Festive Season

Reading Time: 3 minutes

 

The latest guide in our Business High Five series, The SME Guide to Managing Business Finances over the Festive Season, is an overview of how seasonal businesses can improve their business finance operations over the festive season.

 

Download our complete guide to Managing Business Finances over the Festive Season

 

 

In this guide, your SME will be able to make use of insights on:

 

  • The importance of managing finances during the festive season  
  • Understanding how the festive season impacts your industry 
  • Start preparations early  
  • Tips to manage your cash flow during this time
  • Leveraging business funding

 

 

The Importance of managing finances during the festive season

The festive season can be a very rewarding or challenging time of the year for businesses. Depending on the industry, or type of product, it can be the biggest sales opportunity for some and it can come to a standstill for others. If it’s peak season, having enough working capital ready to take advantage of the increased demand to meet your targets, purchase sufficient inventory, hire new staff or invest in marketing becomes a key area of focus.

Our guide shares insight on options you can explore depending on the seasonality of your business and how the festive season impacts it.

 

Understanding how the festive season impacts your industry

During this time there are many strategies that can be put into place to manage changes and importantly, manage a positive cash flow. So while different strategies will work for different businesses, the one thing all businesses will need is a cash flow forecast.

Learn more about how a forecast can help you keep track of you cash flow.

 

 

 

Start preparations early 

The nature of your business makes for distinct approaches to consider when preparing to manage your finances during the festive season. You might need more strategic financial planning to meet responsibilities. Consider the tips we’ve shared in the guide to help start your preparations.

 

Tips to manage your cash flow during this time

From lengthening payment terms, which can cause a lag through supply chains, to slow business activity drying up income theres much to consider during the festive season for seasonal businesses. While everyone prepares to celebrate, business owners might find themselves preoccupied with ensuring that cash flow shortages don’t hinder the progress of their business over the festive season.

We’ve shared cash flow management techniques that are proven to assist with these seasonal challenges.

 

 

Related: 4 Ways to improve your business’s cash flow 

 

 

Leveraging business funding 

Sometimes, despite your best efforts, you may need a financial back-up plan. Learn more of the options you can explore in our latest guide.

 

Download the full SME Guide here.

 

What can delayed repayment funding do for your business? 

To help SMEs get the funding they need to grow their business sooner, rather than later, we’re offering a delayed repayment option to our customers. So if you apply for funding before the end of November 2021, you won’t have to start repaying until 11 January 2022.

 

The SME Guide to Understanding Your Financial Health

The SME Guide to Understanding Your Financial Health

Reading Time: 3 minutes

 

The latest guide in our Business High Five series, The SME Guide to Understanding your Financial Health, is an overview of how you can improve your business finance operations.

 

Download our complete guide to Understanding Your Financial Health

 

In this guide, your SME will be able to make use of insights on:

 

  • The Importance of understanding your financial health 
  • What does financial health look like for SMEs 
  • How is SME financial health measured 
  • Common mistakes to avoid for the best possible financial health
  • Services, Tools and Tech available to help

 

 

The Importance of understanding your financial health

All the decisions you’re making for your business impact your bottom line. It’s important to regularly review the financial status of your business to make sure you’re on the right track and to help with future decisions.

When a business is financially healthy it’s more likely to succeed. Every business needs internal financial controls to help ensure its money is properly managed. While outsourcing experts and using financial technology can be a good idea, it’s also best for you to know how to protect your bank account and your assets. 

 

What does financial health look like for SMEs

The “financial health” of an SME is open to interpretation, depending on the industry, the stage of the company’s journey or the challenges it has faced. But there are some proven metrics that business owners, leaders, investors and other stakeholders can use to objectively assess the health of any company. Implicit in the financial health concept is the question of whether a business has “healthy” income, cash flow statements and a sound balance sheet.

 

Related: 5 Reasons why access to funding is important 

 

 

How is financial health for SMEs measured

 

There is no standard set of metrics for determining an SMEs financial health, as most small businesses are privately held and are not required to release official financial results to the public. The good news though is that there are some well established methods to measure a smaller organisation’s health. Learn more about the most important indicators by downloading our latest guide

 

Try to avoid these common mistakes for the best possible financial health

 

  • Lack of cash reserves
  • Not having a cash flow forecast 
  • Not having a margin of safety between borrowing and debt servicing 

See more here.

 

Related: 4 Ways to improve your business’s cash flow 

 

Services, Tools and Tech available to help

As a business owner and entrepreneur, financial management may not be your area of expertise. This is why it’s advisable to consider using technology partners who can simplify, and often automate, specific tasks. It can also be worthwhile investigating local support service providers to outsource the more complex or labour intensive tasks to.

 

Download the full SME Guide here.

 

What can 60 days of cost-free* funding do for your business? 

To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months.  If prompted enter promo code LULA when applying.

 

5 Reasons why access to business funding is important

5 Reasons why access to business funding is important

Reading Time: 4 minutes

Running a business is a long game that requires flexibility, adaptability and money. To keep it running in the right direction and meeting your growth trajectories is an ongoing commitment. Just as you’ve gathered the funds to get started or your profit is looking good, there comes occasions when extra funding is needed. It goes without saying that access to funding is vital for your business. Particularly funding that can keep up with needs intrinsic to your industry changes, challenges and requirements. Here are 5 reasons to keep in mind on why access to funding is important for your business.

 

1. Research and development
2. Fast access to funding helps secure cash flow
3. Good liquidity helps SMEs trade through turbulent time
4. Funds on tap allow businesses to respond quickly to growth opportunities
5. Unforeseen costs

 


Research and development


While not every business needs research and development in the earlystages, every business needs to stay relevant and innovative. Especially SMEs because they have to keep up with unexpected challenges and competitors with better resources. On the other hand many business owners still rely on thorough research to get ahead of the competition, often leading to having to finance the process. Ultimately, research and development is necessary for accelerating innovation and sustaining relevance, and it requires funding.


A few meaningful ways to start your R&D funding include approaching venture capitalists, seeking government assistance, alternative lenders such as Lulalend and using crowdfunding.


Fast access to funding helps secure cash flow 

The money that moves in and out of your business is important. Any sudden changes can impact your business negatively. Which is why positive cash flow is so important. If it dries up it’s difficult to recover and this inevitably affects all aspects of your business. Anything from seasonal slowdowns or recessions can strike at any time and it’s important to be prepared. With fast access to the right funding you’ll be able to keep a positive cash flow problems arise. Consider flexible options such as Lulalend’s revolving credit facility which is useful to business owners across all industries. This allows you to keep up with the kind of cash flow challenges that affect your business directly without applying for funding every time. 

 

Related: Understanding business credit assessments

 

Good liquidity helps SMEs trade through turbulent times

SMEs generally don’t have big cash reserves to fall back on, so when sales drop they need a safety net to meet day to day operating costs. Ideally a business should have anywhere from a month to six months of cash on hand in case of emergencies. Liquidity requires having accessible funds and together with cash flow, it’s crucial to the survival of small businesses. Keeping a close eye on liquidity allows business owners to make smart decisions about their finances and a healthy ratio helps creditors determine your creditworthiness to secure your business the credit it might need. SMEs need to track the financial health of their businesses and measuring liquidity helps to strike the right balance. 

You can look to financing companies to secure additional funding when the chips are down. This can afford you the flexibility to get through unprecedented cash flow crunches and buy you time to improve or rebuild your usual ebb and flow. 


Funds on tap allow businesses to respond quickly to growth opportunities

A new, recovering or growing business needs money to fund expansion strategies. When a business begins to grow, new locations, products, equipment, more marketing or employees might be required. Consider businesses in the construction industry for instance, where upfront investment may be required to fund projects. These activities add to the existing costs and may need additional funding. At this point profits may be slim and whatever the stage your business is in, outside financing might be an important driver of success to reach those new levels of growth and business development.

 

Related: 4 Ways to improve your business’s cashflow

 

Unforeseen costs

There’s no telling when an accident might jeopardise your hard earned work. From fires to floods, natural disasters and as recently experienced in South Africa, destructive protests and looting, or even staff injuries. You have to stay prepared. While insurance might cover most events, premiums still need to be paid and money for salaries still needs to be available during repairs. Even for less disastrous accidents such as malfunctioning machinery or outdated machinery, equipment breaking, just needing to be upgraded or systems being hacked, funding can come in really handy.

Funding allows businesses to plan ahead. In today’s rapidly evolving financial services industry, it’s good to know the options you can rely on. Importantly, it’s good to build good credit and relationships with alternative lenders like Lulalend that can offer you the flexibility you need to access funding easily and efficiently.