With Higher Tariffs, Automated AR Becomes a Must

Whether you like them or loathe them, there’s no question that higher tariffs make it even more difficult for a business to maintain a healthy cash flow.

Imagine one of your customers orders a new vehicle and months before it was delivered or paid for, you had to pay the government thousands of dollars in taxes.

That’s how tariffs work. Unlike sales taxes, tariffs must be paid up front before a product is sold and revenues collected. As a result, SMBs need more cash on hand and can easily be out hundreds of thousands of dollars in increased tariff fees, with months before any of those monies can be recouped from customers. Having a strong handle on cash flow is especially important for B2B companies who typically have longer payment terms and larger ticket sizes. 

When margins shrink, manual AR can’t keep up.

Companies faced with rising and changing tariffs may also decide that raising the cost of a product to match the entire increased tariff is impossible; and that decision will result in reduced profits. Or, as a hedge against further tariff increases, companies may decide to stockpile goods, further increasing the need for cash.

Once customers buy the now more expensive goods, they also may come under cash flow pressure, causing them to pay late or sometimes, even not at all.

As cash flow issues mount for SMBs, companies that are stretched thin may resort to credit lines or short-term loans for help. However, poor cash flow could persuade a lender to decline a loan or charge a higher interest rate for one.

SMBs, especially in B2B, need to do everything they can to maintain strong and reliable cash flow. And the best way to do that is with an automated accounts receivable (AR) and embedded B2B payments solution.

Turning receivables into a growth enabler.

By automatically sending invoices the moment a product is shipped or delivered, along with customizable payment reminders and the ability for customers to set up AutoPay via a customer portal with digital wallet, sellers are ensuring their invoices do not get “forgotten”. An added benefit: automated invoicing frees up personnel to handle more critical tasks.

In addition, the most effective automated AR systems can proactively pinpoint receivable problems and automatically flag overdue accounts without resorting to spreadsheets or complicated reports. With more accurate, real-time cash flow forecasting SMBs can make faster, better-informed decisions.

These critical automated AR features can increase monthly cash flow, reduce late payments, and avoid costly high-interest short-term loans that would otherwise be necessary to keep operations flowing.

Strong cash flow is the best defense against market volatility. 

As the U.S. enters a time of ever-changing tariff rates, the ability to forecast prices, the need to stockpile inventory, and decide when to do so is becoming ever more challenging. To minimize the impact that tariffs will have, an automated accounts receivable solution integrated into an SMB’s operations is one of the easiest and best ways to stabilize a company’s revenue stream and keep operating expenses low.

Bill360 is purpose-built to help B2B companies get paid faster, simplify their back-office, and eliminate tedious financial tasks. The platform easily syncs with existing accounting systems and provides tools to make secure payments, better understand AR data, and get support with a simple, fast, and effective experience.

Learn more about how you can move your back-office forward with AR automation and embedded B2B payments. Schedule a personalized demo today.