Read this ebook to learn how CFOs can use an automated cash flow management system to help make informed and proactive business decisions.
Cash flow management helps track the cash flows of a company. It provides a comprehensive picture of cost vs. revenue. It also ensures that the organization can take care of expenses while making a profit. CFOs, business managers, and corporate treasurers are often in charge of an organization’s overall cash management strategy, stability analysis, and other cash-related tasks.
According to a U.S Small Business Administration survey, insufficient capital is the second reason small businesses fail. Regular analysis of business finances ensures the projection of future cash flow. It also helps use these business insights to keep businesses afloat.
The finance industry has come a long way in operational growth. But treasury management systems (TMS) cannot fully meet current expectations and adjustments.
Most businesses struggle to keep up with a complicated accounts receivable and payable system and various banks and lenders.
The traditional approach of generating cash flow statements is time-taking because of:
The following are the consequences of using a manual cash management system:
Maintaining a healthy cash flow in a business is essential for its growth and survival. Nonetheless, cash flow is a constant problem for small businesses. Around 60% of small business owners believe cash flow has been a problem for their growing business, with 89% claiming that these issues have negatively influenced the company.
Reasons why managing cash flow is important:
Many businesses suffer due to inadequate cash flow management techniques and systems.
Some of the significant reasons why a cash management system fails are:
Acquiring the essential skills to manage cash flow involves dedication. It includes putting in place methods to ensure the collection of receivables on time. And ensuring money for accounts payable is not disbursed before it is necessary.
The two most significant challenges in the reconciliation process are payment processing timeframes and the lack of information provided with payments. Businesses can eradicate these with the help of automated cash flow management software.
It helps maintain account level status of bank connectivity, balances, and reconciliation status.
CFOs should implement automated cash flow management software to get data-backed insights. A cash flow management system helps in strengthening cash management. This is crucial in the face of market fluctuations and business expansions.
The HighRadius cash management software provides CFOs with:
A construction company working across 900+ active projects chose the HighRadius Treasury suite. They wanted to gain continuous visibility and avoid cash crunches. HighRadius gave them the following benefits:
An automated cash management tool helps companies identify the areas and periods of cash surpluses. It assists them in planning ahead of time by collaborating with various teams. Efficient cash management improves a CFO’s decision-making abilities with real-time cash positions. A cash flow management tool gives data-backed business insights. Also, treasurers can understand their balance in revolvers and lines of credit. This helps avoid reactive decisions that result in overborrowing, penalties, and non-optimal business investments.
HighRadius Integrated Receivables Software Platform is the world's only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway - covering the entire gamut of credit-to-cash.