In today's world, where Thai businesses face fluctuating costs, changing customer behaviour, and increasing competition, effective cash flow management is key to the survival of businesses of all sizes. In an economic environment full of uncertainty, implementing a smart payment system has become an important strategy for increasing liquidity, reducing financial risks, and improving overall business management efficiency.

In this article, we explore cash flow and smart payment systems, the importance of efficient cash flow management, and the benefits of managing cash flow with smart payment systems. We'll explain how to get started with solutions that help Thai businesses track, receive payments, and manage cash flow effectively, while enhancing competitiveness and supporting sustainable growth.

What's in this article?

• What is cash flow?
  
• What is a smart payment system?
  
• Impact of effective cash flow management
  
• Benefits of managing cash flow with a smart payment system
  
• How to get started with a smart payment system
  
• How Stripe Payments can help
  

What is cash flow?

Cash flow refers to the movement of cash in and out of a business or the flow of business income and expenses over a certain period. Cash flow indicates the liquidity of a business. There are three types of cash flow: cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities. Each of these types can be broken down into income and expenses as follows:

What is a smart payment system?

A smart payment system uses digital technology and automated payment systems to receive and make payments. It helps make the payment process fast, secure, and verifiable, adhering to security standards like data encryption, identity authentication, and fraud prevention. A smart payment system can also be connected in real time to accounting systems, inventory systems, or payment data storage systems, meeting the needs of businesses and customers in the digital era.

How are smart payment systems similar to or different from digital payment systems?

A smart payment system is similar to a digital payment system in that it uses digital technology, is a cashless payment method, and uses processes that help make transactions faster, safer and more verifiable. However, digital payment systems generally differ from smart payment systems in the following ways:

Impact of effective cash flow management

Here are some of the things effective cash flow management does for a business:

Improves financial liquidity

Effective cash flow management ensures businesses have sufficient cash to cover recurring expenses like salaries, raw materials, rent or emergency expenses. It also allows businesses to plan for periods of reduced income or unusually high expenses without facing liquidity shortages. This reduces financial risk and helps to decrease reliance on high-interest, short-term loans.

Aids in business planning and decision-making

Information from a cash flow statement provides management with a complete overview of the business, enabling them to plan spending and control expenses efficiently. It also helps in making accurate decisions about potential investments, such as expanding the business, purchasing machinery, or launching new products.

Creates a competitive advantage

Businesses that manage cash flow well can offer more flexible payment terms, resulting in a better competitive advantage in the market. The ability to quickly implement smart payment systems not only helps businesses operate more smoothly, but is also a key factor in enhancing long-term competitive potential.

Enhances financial credibility

Businesses with strong cash flow tend to manage their debt repayments on time, which builds trust with banks and investors, enhances credibility, and reinforces their image as financially disciplined companies. This helps them gain negotiating power and access to funding on better terms, such as lower interest rates, more flexible repayment periods or higher credit limits, which ultimately helps reduce long-term financial costs.

Boosts crisis resilience

Businesses with sufficient cash flow and prudent cash flow management are better equipped to handle various crises. Even if sales slow down, the economy declines, the number of competitors increases, or emergencies arise, the business can still recover and maintain continuity in taking care of employees, partners and customers appropriately. As a result, the impact of crises will be less severe than for businesses lacking liquidity.

Supports sustainable growth

Effective cash flow management ensures stable growth that aligns with a business's true financial potential. It prevents expansion that exceeds the ability to cover expenses and financial obligations. A business is thus empowered, when it's ready, to seize opportunities such as expansion, development of new products or services, and adoption of new technologies or innovations – without impacting liquidity.

Benefits of managing cash flow with a smart payment system

Managing cash flow with a smart payment system offers many advantages in the areas of finance, management and business growth. These can be summarised as follows:

Better financial and liquidity planning

Smart payment systems provide systematic cash flow reports through user interfaces (UIs) like Stripe Dashboard, supporting quick and accurate decision-making. Real-time data allows for analysis of revenue, costs and value-added tax (VAT). You can monitor accounts receivable, ageing of debt, and cash flow forecasting to prepare for future expenses or investments, enhancing liquidity and financial planning capabilities.

Speedier payment processing

Smart payment systems support transactions using multiple methods, such as PromptPay, QR code and mobile banking. When the payment process is more efficient, businesses receive payments in shorter timeframes, sometimes even instantly. Furthermore, integrating a smart payment system with an e-invoice system that automatically generates invoices allows for accurate payment tracking, reduces the average time to collect payment (aka DSO – days sales outstanding), and enhances overall cash flow stability.

Easy integration with other systems

Smart payment systems can easily integrate with accounting systems, enterprise resource planning (ERP) systems, inventory management systems, customer relationship management (CRM) systems, or other business management systems. In addition, smart payment systems can connect with e-invoice systems like Stripe Invoicing, which automatically issues invoices, reducing paperwork, printing and delivery costs. Data can be stored digitally; transaction data is recorded and processed directly from the system.

Real-time cash flow monitoring

Using a smart payment system provides businesses with complete and transparent financial data. Easy review of past transactions provides a true picture of income, expenses and cash balance in real time. This results in systematic financial management, reduces data errors, and enables accurate cash flow planning. Real-time transactions enable businesses to deliver superior and more efficient services.

Reduced workload and increased operational efficiency

A smart payment system automatically records transaction data, reducing errors from manual entry, easing paperwork and reconciliation time. It helps ensure timely expense management, lowers costs from interest or late payment fees, and can quickly detect transaction anomalies. This increases billing accuracy, reduces outstanding payment issues, and minimises fraud risk and accounting discrepancies, resulting in a more efficient operational process.

Strong security measures

Smart payment systems employ technology that supports real-time transactions and has the ability to detect suspicious transactions with AI, helping prevent fraud and corruption. Smart payment systems also come with advanced security, including multilayered security systems like authentication via one-time password (OTP), biometrics, or tokenisation.

Enhanced payment experience

Using a smart payment system provides users with a more modern payment experience, enabling instant payments and transactions 24 hours a day, 7 days a week. This enhances satisfaction and convenience, meeting the needs of modern businesses. Suppliers and customers can track their payments in real time online and download tax invoices, receipts and VAT reports.

How to get started with a smart payment system

Implementing a smart payment system to improve cash flow management can be done by following these steps:

Analyse and select payment methods

Before starting to use a smart payment system, you should first assess which payment methods your business needs to accept and which your current customer base uses the most. Analysing and evaluating your business plan will help you choose the most suitable payment system for your needs. A smart payment system serves as a central hub for receiving payments from multiple sources.

Choose a smart payment system provider

When choosing a reliable smart payment system provider, look for one that:

• Supports payment methods that meet the needs of businesses and customer groups, such as mobile banking, PromptPay, digital wallets, QR codes, or payment links
  
• Has high safety standards, such as compliance with the PCI DSS (Payment Card Industry Data Security Standard), the use of data encryption technology and multifactor authentication, and fraud prevention capabilities such as the use of machine learning to detect transaction anomalies and flag suspicious chargebacks
  
• Easily supports API connections with payment systems, accounting systems, or ERP systems
  
• Has a reasonable and transparent fee structure with no hidden charges or long-term commitments
  
• Has a highly stable system with real-time data updates, such as solutions like Stripe Payments, which offers automated online services with a historical uptime rate of up to 99.999%
  

Sign up

Once you've selected a payment method and compared fees, you can contact the smart payment service provider to start using the service. You should prepare the following documents for the application:

• Company registration certificate or business registration
  
• ID card of the authorised signatory
  
• Bank account details
  
• Other supporting and financial documents (these vary depending on the service provider)
  

Connect to the smart payment system

A key feature of a smart payment system is its ability to easily connect with various systems via APIs or plugins on a business's website or platform. Once approved, businesses can start accepting payments and track transaction data in real time.

After connecting to the smart payment system, the next step is to integrate with the accounting system, ERP system, or other organisational resource management system. This allows for the automatic recording of transaction data and tax details, reducing redundancy and improving financial management efficiency.

Test the system and train users

A smart payment system should be tested before its official launch to confirm readiness and to identify potential errors. This will help ensure that payments are processed smoothly and securely. Before launch, do the following:

• Verify the security and accuracy of the money transfer process
  
• Test the system's stability and performance
  
• Test its ability to connect with other systems, such as accounting or ERP systems
  
• Train employees to understand and use the smart payment system
  

Activate the system and monitor results

After the smart payment system has passed testing, transactions should be regularly monitored and analysed to ensure the system operates securely and efficiently. The data obtained can be used for marketing and financial planning, improving the system to align with customer behaviour, and promptly addressing any potential issues.

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.

Stripe Payments can help you:

• Optimise your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty, and grow revenue
  
• Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability
  

Learn more about how Stripe Payments can power your online and in-person payments or get started today.