Unpredictable cash flow can be the silent killer of growth, efficiency, and ultimately your ability to stay in business.
Businesses need steady revenue to stay viable. More so for MSP businesses, who rely on regular cash flow to keep services going and recover the upfront costs incurred in delivering a service or making a purchase. However, many MSPs struggle with predicting and maintaining a steady cash flow. In this blog, we will discuss the top 3 causes of unpredictable cash flow and ways to tackle them.
But before that, let me ask you a couple of questions:
Can you predict your cash flow for the next 6 months?
What do you think are the biggest causes for this unpredictability?
We asked the same questions to a bunch of other MSPs like you and we have identified the real-time challenges of MSPs in ensuring a predictable cash flow. The good part is almost all of the challenges can be resolved with an automated quoting process. Here’s how:
Avoid billing surprises
You’ve got your monthly expenses planned out. You know what you’re shelling out and you know you’ll get it back at the end of the month. One of your clients wants to finally replace their broken printer. You buy a printer, add the bill to the usual invoice, and wait for the money to kick in but No. The client is surprised at how costly the new printer is, or how they could’ve done without a printer had they known the cost of the replacement earlier. End-of-month is now near and you still have less money in the bank than you started out with.
Surprises are not good, especially if it results in a loss of money for you or in an awkward situation with your client.
So, how can you avoid such surprises?
We believe that any negotiations involved should be carried out before you act on the requests, not when it is time for payday. Agreeing on a quote with the client at an early stage can help avoid last-minute surprises.
Don’t get lost in a pile of quotes
Quoting shouldn’t be a dreadful process. Ideally. You know the accurate price for the value provided, you send out a quote, never revisit it again, and get paid on time. But we’re not talking about an ideal world. We’re talking about the MSP world. We’re talking complex pricing plans, exhaustive service items, and configurable contracts.
You could be sending out multiple quotes with different numbers, different products, and at different timelines.
How to keep better track of the quotes? We believe a quote’s lifecycle should end in an invoice, and if not, there should be an accurate way to keep track or maintain a log of everything that led to the final approval.
Help technicians with accurate service details
You may have a diverse service catalog with complex contracts and pricing models. Your technicians could be tracking approvals out of email or ticket threads. They could be managing quotes out of spreadsheets. There should be an efficient alternative that doesn’t leave so much room for expensive errors.
You need a way to automate or standardize your quoting process not only to ensure you get paid accurately for the services provided but also to iron out any inefficiencies and delays in ensuring steady profitability for your business.
How can you solve these issues anyway?
Chasing quotes needs to become a thing of the past. Right now, fewer MSP solution vendors out there, if any, have all these needs covered. Despite the issue being prevalent among MSPs. Some vendors offer integrations with external quoting tools. But it isn’t good enough. Not being able to consolidate clients, existing contracts, and information about the services provided into a single, streamlined quoting flow can still put you in a pickle.
Wondering why this, why now? Stay tuned, and watch this space to know what we’re onto!