Did you know that about 80% of small businesses fail due to subpar cash flow management? Moreover, about 60% struggle with cash flow regularly. Managing cash flow and dealing with unexpected expenses and unpredictable revenues in an unpredictable economy is stressful.
As your business grows, it becomes much more difficult to track, analyse, and optimise cash flow. So, what is the best way to track cash flow without becoming one of those 80% businesses? A trusted cash flow management software.
Continue reading to understand the cash flow management software meaning, and learn how to choose the best cash flow management software.
What is Cash Flow Management Software?
Cash flow management software helps businesses track, analyse, and forecasttheir cash flow. Such software can automate your accounting processes, generate cash flow reports, provide analysis based on reports, and give insights for improvement. Some cash flow management software even alerts you of potential problems.
Why is Cash Flow Management Software important for businesses?
Some features of a cash flow management software that make it important for businesses include the following:
Inflow and outflow tracking: Allows you to view your actual cash flows in real time.
Customisable alerts: Allows you manage your cash position by notifying you of payment terms, bank overdrafts, and cash shortages/surpluses. Your alerts can be based on multiple criteria.
Reliable bank data: Ensures you have up-to-date information on bank balances and transactions.
Automated bank reconciliation: Simplifies the process of matching the bank transactions with accounting records. This allows you to reduce errors and save time.
Cash flow forecasts: It helps you anticipate cash needs and plan ahead. Cash flow projects are available based on historical data and data-driven assumptions. You can also compare different scenarios to see how they affect your cash flow.
Multi-period forecasting: Enables you to generate and customise based on templates and formats. The reports contain charts, graphs, and filters, which you can share with others.
Excel-model imports: Allows you to connect your cash management software to your accounting software and enables data sync. This prevents data duplicacy and inconsistency and gives you access to a single source of truth.
Now that you’re clear about the cash flow management software definition, let’s discuss how you can choose the perfect one for your business.
How to Choose the Best Cash Flow Management Software?
While choosing a cash flow management software for your business in 2023, ensure it meets the following criteria:
Features: The software should be able to meet your business’s needs. Cash flow reporting is a must. You could consider other features such as forecasting, scenario planning, budgeting, invoicing, and cash collections. It should be able to connect with other financial software and help you streamline operations.
Ease of use: The software must come with a small learning curve and be easy to use. Ensure it is easy to set up and a customer support team is ready to help you with any issues.
Cost: The software must fit within your budget. Many software offers customised pricing based on your needs and budgets. However, ensure the pricing is transparent and take a demo before finalising the contract.
Reviews: Go through online reviews of the software to pinpoint its strengths and weaknesses.
Related article: Advantages of cash flow management: Several ways how companies benefit from it
Top cash flow management software for small businesses
Say goodbye to the tedious work of Microsoft Excel with the following software to help you avoid cash flow problems and help forecast your future cash needs:
Agicap
Agicap is the UK’s leading cash flow management software driven to accelerate the growth of small businesses by making it easier for businesses to manage cash flow in real-time. It lets you centralise all your cash flow monitoring on a single platform. You can then connect this data with your management and ERP tools to get real-time exhaustive information.
It also syncs and categorises your banking transactions (in multiple currencies) to make cash flow management even easier. One can monitor and forecast their cash flow using entity or consolidated views, so if you have multiple businesses, Agicap is all you need.
Plus, with Agicap, you can compare your real-time forecast cash flow with the real cash flow. Besides, it allows you to model and test different scenarios, ensuring every decision you make is driven by possibilities and data.
Once you’ve built your dashboards, you can calculate your business’s key indicators and share the report with your team.
Causal
Causal is primarily a business planning software offering functionalities such as cash flow management for finance teams. It helps businesses forecast future cash flow based on historical data and past transactions. It lets you build clean and simple models effortlessly and connect them with your business’s data to create interactive dashboards with clean visuals.
With Causal, businesses can leverage flexible modelling that reduces errors by using natural formula language. It specialises in multi-dimensional, multi-currency, and multi-entity models. You can incorporate different financial models, business entities, and currencies with Causal for efficient data churning.
You can also run scenarios with probabilities to explore different outcomes and then easily compare the versions in real-time to make robust, data-based decisions. It makes collaboration with teams easier with its custom viers and permissions feature.
Cube
Cube is the next-gen financial planning and analysis software that provides cash flow forecasting and scenario analysis to improve a business’s cash flow planning. It allows you to integrate data from several platforms, including Excel and CRMs.
The data from all the sources is automatically collected, consolidated, and reported — it centralises your data and performs deep calculations to transform and organise it. You can track the changes and configure the experience to ensure you get what you want.
With Cube, you can seamlessly collaborate with various departments, share dashboards, and gather feedback.
What is the best way to track cash flow?
Businesses have various platforms to track cash flow, depending on your needs and preferences. You can choose between cash flow forecasting software, cash management tool, and cash flow project software:
Cash flow forecasting software: It can help organisations estimate the amount of cash coming and going out of your business over a period. On the basis of this data, it can predict your future cash flow, help you avoid cash shortages, and make investment decisions. A cash flow forecasting tool will use different methods and sources of data to forecast the cash flow and consolidate the data in reports and dashboards.
Cash flow management tools: These tools can enhance your cash flow management by streamlining your cash management processes and enabling you to optimise your cash position, lower your costs, increase your liquidity, and reduce your risks. Cash flow management software solutions include features such as cash pooling, netting, sweeping, hedging, and investing.
Cash flow projection software: It can help you create and analyse cash flow projections for your organisation. A good cash flow projection software will have features such as planning for different scenarios such as expansion, growth, or downturn, comparing actual and projected performance, and identifying gaps or issues.
Manage your cash flow with the best software
Cash flow management software automates tedious tasks such as invoicing, reconciling, reporting, and payment collection so that you can focus on strategising and implementation. It can help you avoid running out of cash or missing payment deadlines, helping you maintain a healthy relationship with internal and external stakeholders.
Cash flow management software, such as Agicap, is known industry-wide for its ability to improve a firm’s financial health by enabling data-driven decision-making. This has been shown to improve business performance, reduce working capital requirements, and increase cash surplus.
Agicap is the perfect tool to anticipate payment difficulties!
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I am an expert in financial management and business software solutions, with extensive knowledge of cash flow management and related technologies. My experience in this field allows me to provide valuable insights and recommendations to help businesses thrive in challenging economic environments.
In the article you've shared, the focus is on the critical aspect of cash flow management for small businesses and the role of specialized software in addressing common challenges. Let's break down the key concepts mentioned in the article:
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Cash Flow Management Software:
- Definition: Cash flow management software is designed to track, analyze, and forecast a business's cash flow. It automates accounting processes, generates reports, provides analysis, and offers insights for improvement. Some software also provides alerts for potential problems.
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Importance of Cash Flow Management Software:
- Inflow and Outflow Tracking: Real-time monitoring of actual cash flows.
- Customizable Alerts: Notifications for payment terms, bank overdrafts, and cash shortages/surpluses.
- Reliable Bank Data: Ensures up-to-date information on bank balances and transactions.
- Automated Bank Reconciliation: Simplifies matching bank transactions with accounting records, reducing errors and saving time.
- Cash Flow Forecasts: Anticipates cash needs and facilitates planning based on historical data and data-driven assumptions.
- Multi-Period Forecasting: Enables customization based on templates, providing reports with charts, graphs, and filters.
- Excel-Model Imports: Connects cash management software to accounting software, preventing data duplicacy and inconsistency.
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Choosing the Best Cash Flow Management Software:
- Features: Should meet business needs, including cash flow reporting, forecasting, scenario planning, budgeting, invoicing, and cash collections.
- Ease of Use: Should have a small learning curve and be easy to set up, with reliable customer support.
- Cost: Must fit within the budget, with transparent pricing and the option for a demo.
- Reviews: Online reviews can highlight strengths and weaknesses.
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Top Cash Flow Management Software for Small Businesses:
- Agicap: Focuses on real-time cash flow management, centralizing data, and offering forecasting capabilities.
- Causal: Business planning software with cash flow management, clean models, and interactive dashboards.
- Cube: Financial planning and analysis software for cash flow forecasting and scenario analysis.
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Types of Cash Flow Tracking Platforms:
- Cash Flow Forecasting Software: Estimates cash coming in and going out, predicting future cash flow.
- Cash Flow Management Tools: Streamlines cash management processes, optimizing cash position and reducing risks.
- Cash Flow Projection Software: Creates and analyzes cash flow projections, considering different scenarios.
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Benefits of Cash Flow Management Software:
- Automates tedious tasks (invoicing, reconciling, reporting, payment collection).
- Helps avoid cash shortages and missed payment deadlines.
- Improves financial health through data-driven decision-making.
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Call to Action:
- Encourages businesses to use cash flow management software for improved financial health, citing Agicap as an example known for enhancing firm performance.
In conclusion, the article provides a comprehensive overview of the importance of cash flow management and highlights specific software solutions to help businesses effectively manage their finances.
