Whether you own a small business or not, likely, you are always finding ways to make money management easier, quicker, and wiser.
Well, look no further! With Fintech innovations, the face of small business finance is being changed in unimaginable ways. But what is Fintech, and how can it help?
Let’s dive into this very interesting world and find out how such technological innovations are changing the face of finances for small businesses like yours.
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What is Fintech?
The term “fintech” is a combination of two words: “financial” and “technology.” Generally speaking, fintech describes some sort of new technology that is directed at improving and automating the use and delivery of financial services.
With Fintech, small businesses enjoy wider access to finance, more sophisticated financial management, and personalized financial advice at the tap of their fingers.
How Fintech Is Changing Small Business Finance
1. Access to Funding
One of the most critical challenges traditionally faced by small businesses is fundraising. In other words, whether it’s a new venture, the expansion of an already existing one, or just cash flow management, finding the right finance is tough. But all that is now changing with the rise of fintech.
Online Lending Platforms: One does not have to go to the bank, which always requires one to do a load of paperwork, keeping one waiting for months. The Fintech firms have introduced online lending platforms through which small-scale businesses can get loans with minimal paperwork and with speed. In many cases, in a few hours, sometimes on the same day you get approval.
Crowdfunding: The other exciting innovation of FinTech is crowdfunding. It enables money to be raised directly from the public using platforms such as Kickstarter and Indiegogo. Whether it be launching a new product or just raising funds for a special project, crowdfunding provides the need for funds without necessarily putting someone in debt.
2. Improved Cash Flow Management
Managing cash flow is surely one of the most stressful parts of running a small business. Fortunately, fintech tools make it easier than ever to keep track of your finances and avoid finding yourself short.
Invoicing and Payment Automation: Fintech software automates invoicing for you; it even sends out bills on your behalf for follow-up with late-paying clients, getting you paid quicker without you wasting so much time tracking down the money.
Tracking Expenses: Using fintech virtual wallet apps, you can track your expenses in real time. These virtual wallets auto-categorize your spending; this, in fact, is how you know where your money went. Some even connect directly with the bank account to give on-the-dot views of financial health.
3. Simplifying Accounting and Bookkeeping
Accounting and bookkeeping are a necessary evil; they nevertheless take up the time. The innovations in Fintech are making these tasks swift and agile.
Cloud Accounting Software: QuickBooks and Xero have taken accounting into the cloud. Access your financial records from any place and at whatever time that is convenient. Other inclusions of such tools are automatic reconciliations, customized reports, and even tax preparations.
AI-Powered Bookkeeping: With the use of most fintech tools, you can outsource bookkeeping jobs using artificial intelligence. You will require less time for data entry and spend more time focused on growing your business. AI will help detect even patterns in your financial data and suggest insights that may be beneficial to you for making better business decisions.
4. Increased Security
Security is the big concern of any business, especially when financial transactions are concerned. Fortunately, fintech has brought innovations that make your financial operations a lot safer than before. Financial technology platforms grant two-factor authentication besides mere password authentication. This adds extra security to your accounts so that sensitive information cannot be reached by unauthorized users.
Blockchain Technology: This is the same technology deployed behind digital cryptocurrencies, such as Bitcoin, for securing a transaction through the creation of tamperproof records of transactions that make fraud next to impossible.
5. Personalized Financial Advice
Wouldn’t that be something—a financial advisor at your beck and call, 24/7? Well, that is now a reality courtesy of Fintech.
Robo-Advisors: Digital channels that essentially provide automated, algorithm-based financial planning services. Whether it is investment advice, budgeting, or even retirement planning, robo-advisors present personalized advice peculiar to your financial situation.
Customizable Dashboards: A great many of the tools available in fintech will support creating customizable dashboards—a snapshot of financial health. This might range from cash flow projection to investment performance, presenting all the insights one could possibly want to make informed decisions.
Why Fintech Is Now a Game-Changer for Small Businesses
As we discussed how fintech is changing small business finances, let’s now discuss why this innovation is such a big deal:
Speed: Fintech solutions are fast. Be it applying for a loan, paying someone, or creating a financial report; everything gets done in fractions of the time it will take using traditional methods.
Ease of use: You are not compelled to be a financial luminary to make use of apparatus in FinTech. Most of these platforms are streamlined and, as such, quite straightforward and very easy to use.
Affordability: Most of the Fintech tools are affordable, especially through the use of their services in comparison to traditionally available services. It is this that made them accessible to even small businesses with their constrained budgets.
Flexibility: Fintech solutions address a broad range of needs that can be tailored to best suit your business. Whether you are a freelancer, a startup, or a small established business, there is likely to be some fintech tool that will best suit your operations.
How to Get Started with Fintech
Getting started with fintech does not have to be complicated. Here are a few steps to consider to get you going:
Identify your needs: What are your huge financial pains in your business? Is it funding, cash-flow management, or probably bookkeeping? Knowing what you need will help guide you to the right fintech tool for your business.
Shop around: With so many options available, it would be important to look around for tools that have great reviews and which will get you what you need.
Start Small: You don’t need to replace the whole financial system in one go. In fact, start by integrating one or two Fintech tools into already running operations and progress with adding more as one gets comfortable.
Stay ahead of your industry: Fintech is an industry in constant evolution. Stay tuned and learn about new tools and features that may help your business.
Conclusion
Fintech innovations are shifting small business finance in many ways, from ease and time consumption to security regarding managing your money.
From access to funding and superior cash flow management to enhanced security and personalized advice on finance, Fintech is balancing the playing field for small enterprises.
Harness these powerful tools and give that much-needed financial boost to your venture. At least in this age, use Fintech as a tool to stay abreast with competitors. Do not let go of this golden opportunity, a metamorphosis that is very well revolutionizing finance in small businesses.
