Got cash flow conundrums?
You’re not alone. Nearly 3 in 4 Aussie businesses have reported having cash flow issues in the past 12 months — and, with the dynamic and ever-changing business environment that we’re operating in during COVID-19, cash flow matters more than ever.
If there’s one goal you need to have for your business, it’s to get a handle on your cash flow.
Here’s the good news: you don’t need to hire a number-cruncher to improve your business’s financial health. There are plenty of tools out there to help you get a handle on your cash flow, from basic forecasting and management tools to in-depth analytics.
In this post, we’ll run through four things you should look for in your cash flow management software, as well as our top 5 picks for businesses in 2023.
But first things first...
What is cash flow, and why does it matter?
Cash flow is the amount of cash “flowing” in and out of your business. This includes income from your customers and clients, and expenses like salaries, rent, debt repayments, tools, and inventory.
There are two parts to the cash flow equation:
Cash flow management: The process of tracking, analysing and improving the financial health of your business. The goal is
to be “in the green”, where you have more money coming in than going out and you’re making a profit, not just breaking
Cash flow forecasting: This involves estimating your future cash flow based on projected sales and expenses. With accurate
forecasting, you’ll be able to figure out if you’ll have enough in the bank to run your business in the future or if you can
afford to expand.
Manage your cash flow well, and you’ll have enough money coming in to cover your expenses, fewer headaches, and the confidence to grow your business. Manage it poorly, and you’ll be in the weeds or, worse, even shutting up shop.
That’s where technology makes all the difference: it can help you stay on top of the numbers, plan ahead, and improve your cash flow.
4 things to look for in cash flow management software
There are tons of different cash flow management tools out there today, from simple tracking tools to robust platforms with all the bells and whistles.
Ultimately, the right software for you will depend on your business needs. However, it pays (literally!) to make sure your platform ticks off these four boxes:
Integration with your existing accounting software. These platforms are gold mines packed with insights that will help you
manage your cash flow and plan for the future.
Automation. Look for a platform that automates as many pesky manual processes as possible, from reporting to pulling
information directly from your accounting software.
- Easy to set up. The best tools are the ones you can get up and running ASAP — not ones that require extra web development time or hours of training.
- Accessible. You shouldn’t need a degree in finance to understand the information from your cash flow management software! The tool you choose should present all the information you need in a clear, user-friendly way.
5 cash flow management tools to try in 2023
Like water, Float is fluid and flexible, which makes it a great option for businesses of all sizes. The tool comes with plenty of features, including a visual view of your past, present and future cash flow and real-time forecasting.
With Float, you can also answer those “what if’s” with their nifty scenario planning feature. This makes it easier to figure out where your finances would stand if you made a new hire, expanded your business, purchased a new asset, or anything in between.
Float also integrates with Xero and pulls information directly from your bank accounts, so you can get a real-time overview of where your business stands without needing to put in extra leg work.
Fathom brings together two key pieces of the cash flow puzzle: business planning and
powerfully simple three-way forecasting. The focus is on providing financial insights to drive more informed decision making. With this
tool, you’ll get access to reporting, forecasting, and financial insights with a clean, easy-to-use interface.
Fathom's main point of difference is that it provides users with the ability to seamlessly model planned business activities and create different business scenarios across the Profit & Loss, Balance Sheet and Cash Flow Statement in just a few clicks. These plans can then be viewed on a Business Roadmap, helping you to plan what will happen, and when. You can also report on each of your scenarios in Fathom’s polished management reports to help you get the most out of your numbers.
Fathom integrates with key accounting software including Xero, Quickbooks and MYOB.
Futrli Predict’s selling point is that it makes cash flow forecasting simple, live, fast and accurate for small businesses. This tool pulls data from your existing accounting software and build a forecast across your P&L, Balance Sheet and Cash Flow for the next 3 years — all in minutes.
Futrli Predict is also jam-packed with useful information for business owners, including a breakdown of income streams, outstanding bills and invoices, and analysis into customer trends, company debts and tax.
Like the other tools on this list, Futrli Predict integrates with Xero. On top of that, you can hotlink your Futrli account with Google Sheets for seamless management in the cloud.
Cash Flow Frog
Cash Flow Frog is a straightforward, easy-to-use cash flow forecasting and scenario planning tool that helps you understand the current financial health of your business and figure out where it’s heading in the future.
On top of forecasting and planning, Cash Flow Frog provides users with intelligent cash flow projections, customer insights on sales and payment timings, and customisable reporting. You can also check your planned cash flow and compare it to your actual results to see how your game plan worked out. Cash Flow Frog integrates with major accounting software, including Xero.
Summit is an up-and-coming platform that’s making waves thanks to its highly visual cash flow forecasting and financial planning tool. Coining itself as a ‘financial canvas’ for businesses, Summit is incredibly flexible and easy to use — especially for teams or owners that aren’t huge Excel users.
The best bit? Summit is in early access, which means it’s currently free to use.
Over to you
Cash flow forecasting and management are two essential components of any successful business. With the right tools in your tech stack, you’ll be well on your way to running a financially healthy business that survives and thrives.
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