SMBs’ current scenario
Small and mid-sized companies account for 40-50% of economic activity in many countries. They generally face problems in having a positive cash flow. Moreover, an SME doesn’t have a specialized finance team with finance directors and accountants. Most treasury employees have a variety of roles in small businesses.
SMBs don’t have individual departments dedicated to budgeting, A/R, A/P, and Payroll. They are also more vulnerable to cash shortages. Hence, they are more burdened with plenty of tasks.
However, with the proper cash flow management services, they can:
Automated cash flow management software can guide cash flow planning with reliable data. In this way, businesses can analyze cash on hand and better understand their financial situation.
How do traditional approaches to cash flow management undermine the integrity of small and mid-size companies?
Over the years, the treasury faced many cash flow management system challenges. Many businesses struggle to collect and analyze financial data. SMEs often need access to growth capital during the expansion phase. But they are unable to improve liquidity due to these challenges:
Businesses need to choose the right cash flow management services to improve their daily operations.
1. Gain real-time cash visibility with automated data gathering
PwC’s survey shows that 26% of daily global cash is not visible to the corporate treasury. Hence, treasurers are stuck with outdated or inaccurate cash positions.
This leads to:
As a result, companies may lose strategic opportunities. And there can be short-sighted decisions.
An automated cash flow management system is a game-changer for this. It assembles data from different sources into a single system automatically. It also automatically classifies the bank transaction category based on transaction details.
2. Enhance data efficiency through automatic reconciliation
Cash flow management software provides these features in bank reconciliation:
3. Faster access to cash and transparent decision-making
Financial transparency is a key advantage of small business cash flow management software. Besides, cash flow management software improves planning by:
The power of data defines good cash flow management. Regular cash flow tracking improves the management of investments, assets, expenses, and debt.
In an ever-expanding digital environment, the market is prone to fluctuations. So, small businesses and mid-size businesses must become more agile and transparent to manage daily cash flows. With emerging technologies like RPA, the future of cash management can improve a lot.
With an automation system, business owners or managers can:
Benefits with HighRadius automated cash flow management software
HighRadius cash flow management software helps SMBs by providing the following features:
It connects with banks, ERPs, and independent market data systems. It processes files in any format and categorizes transactions based on:
and displays them in customizable templates.
Automated bank statement processing and reconciliation help treasury:
Global cash visibility contributes to better reporting and better long-term management. This also improves credibility with external stakeholders.
Informed and timely acquisition or funding decisions help:
Moreover, the ROI increases due to time and cost savings.
A $10 million global industry leader faced these challenges:
By using the HighRadius cash flow management system, it achieved the following results:
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