This archive report was first published on 11 December 2019.
Wednesday, December 11, 2019, marked the beginning of a new era for businesses, with many small and medium-sized enterprises (SMEs) facing a rocky road ahead. As the year draws to a close, it's clear that the current business environment is challenging, with cash flow drying up and consumer purse strings tightening.
According to Mbugua Njihia, the situation is dire, with many SMEs struggling to stay afloat. 'There is no worse state than being invoice rich but cash poor,' he notes. To overcome this challenge, firms must prioritize efficiency in 2020.
Efficiency will be key to success in 2020, and firms must adapt to optimize their outcomes. With depressed purses affecting both the consumer end and business teams, it will be essential to double down on channels that have auditable ROI. Organic discovery will also be crucial as more of the corporate class, faced with uncertain job futures, dive into additional side hustles.
To achieve this, SMEs need to do two things: ensure that marketing and discovery are sorted, and then automate collections and actively track the status and age of any outstanding payments. A nifty integration with a feature-full payment gateway and cloud-based accounting platform would deliver. Second, SMEs should rethink terms of engagement, such as dunning fees on service contracts, to protect and compensate for the unintended credit support position that SMEs are forced into.
