From Spreadsheet Woes to Cash Flow Control: How Automation Can Revolutionize Your Cash Flow Management

Introduction

Managing cash flows is no easy task, especially as businesses grow and their volumes of cash flow increase. In today’s rapidly changing business landscape, it has never been more critical to leverage technology to manage cash flows and increase agility. While spreadsheets may be a familiar and low-cost option for managing cash flows, their limitations and potential risks make them less than ideal for enterprises looking to maximize their financial performance and efficiency. 

Using Excel spreadsheets to analyze daily global cash positions is a significant time-waster, consuming a whopping 1,296 hours per year, as reported by Pymnts. Finance chiefs of leading global enterprises have also raised their concerns about their teams using spreadsheet software that hasn’t been able to keep up with the evolving requirements of their finance operations in an article published by The Wall Street Journal. 

Let’s deep dive into the challenges posed by spreadsheet-based cash flow management to understand the reason behind such strong opinions. 

Challenges posed by spreadsheet-based cash management 

Highly manual and time-consuming process

Cash managers spend nearly 15 hours per week reconciling bank statement items with their company’s books. Not to mention, the hassle of logging into several bank portals to collect bank statements for hundreds of bank accounts across the firm and populating multiple spreadsheets with the data. The method is not only time-consuming and error-prone, but it also requires a lot of labor. One of the many other headaches associated with the process is going back and identifying discrepancies and rectifying them.

Low visibility into your company’s finances

Browsing through several spreadsheets and updating the cash positions of each and every bank account is no walk in the park. To get the final end-of-day cash positions of each and every account, a cash manager must check the statements, populate several rows in multiple spreadsheets, and do multiple calculations. Because everything has to be finished manually before the end of the day, you’d be surprised how often a cash analyst or manager misses a few details while analyzing your company’s cash flows.

Poor reporting results in bad investment decisions

As a consequence of the previous steps, more often than not the reports generated are incorrect. Taking intercompany loans instead of seeking funding from external sources can save you up to 30% in interest fees. Despite this, treasurers end up making wrong decisions and wasting thousands of dollars by paying exorbitant interest rates due to poor visibility over their company’s cash positions.

Benefits of automating your cash management system

Automating cash flow management effectively can save millions of dollars in staff time every year, and substantially speed up the cash management process while simultaneously improving employee productivity, efficiency, and reporting. Here is how automating the cash management process can help you. 

Easy integration with multiple data sources via APIs and sFTP

You no longer need to manually fetch data from portals because the HighRadius Cash Management Cloud connects seamlessly with all banks, ERPs, and independent market data sources to process files in all formats including XML, BAI2, MT940, ISO20022, XLS, and CSV. You can auto-classify transactions based on bank, account, region, and category and view them in customizable templates. It also allows you to override or manually upload additional data as required.

Automated matching of previous day records with bank statement items

The solution auto-reconciles transactions based on standard and user-defined rules without the need for any manual intervention. It also allows you to manually match or rectify any discrepancies. Automated bank statement processing and reconciliation saves time, reduces errors, and frees up cash managers to focus on other higher-value tasks. Reconciliation automation can help in pre-and post-payment validation and reconciliation. Not only does the system send notifications about exceptions, but it also tracks and identifies potential duplicate payments.

Better visibility into company’s cash

No more skimming through multiple spreadsheets to get a view of company-wide finances because now you can check real-time cash positions across bank accounts, companies, pools, and currencies in user-defined worksheet templates with transaction-level drill-down capability. Based on this information, the HighRadius Cash Management Cloud creates recommendations for concentration and funding transfers. With the software, you also get continued global visibility into your cash across all banks, regions, companies, and currencies in a unified manner.

Accurate reporting for data-driven decision making

With an intuitive user interface, automation helps you break away from multiple spreadsheets to one single consolidated dashboard. Better visibility contributes to better reporting and, as a result, better decision-making. Now that you have an idea of intercompany activities and where your cash is, you can figure out if you have any surplus cash lying around and the accounts that might need funding. As a result, you won’t have to borrow money from vultures on the street.

Improved workflows and increased business agility

Automating workflows create a clear structure, a sense of routine within the business, and establish security, compliance, and accountability. It is essential to provide employees with the right automation tool to assign tasks and execute their work to the best of their abilities.

Quick View: Spreadsheet-Based Cash Management vs. Automated Cash Management

Spreadsheet-Based Cash Management Solution	Automated Cash Management Solution
Logging into multiple banks and ERPs to collect data and manually populate cells in spreadsheets, making it error-prone and time-consuming	Connects with multiple banks and ERP to process files in all formats including XML, BAI2, MT940, ISO20022, XLS, and CSV; faster and efficient
Matching bank statement items with company’s records, identifying discrepancies, and rectifying them	Auto-reconciles transactions based on user-defined rules and notifies you of any discrepancies so you could correct them
Check bank statements, populate several rows in multiple spreadsheets, and do multiple calculations; error-prone, time-consuming, and poor visibility into company’s cash positions	Shows real-time cash positions in user-defined worksheet templates with transaction-level drill-down capability. Higher accuracy resulting in better visibility
Poor investment/borrowing decisions as a result of low visibility and inaccurate reports	Generates detailed reports for better decisioning

This is just the tip of the iceberg of what automation can do to transform the current cash management landscape. Highradius’ Cash Management Software is a scalable solution that helps more than 2,500 companies around the world to better manage cash positions. It is easy to use and can be accessed from any place or device. The software implementation requires very little help from your IT personnel to get you started.

Game-changing features of HighRadius’ Cash Management solution

Highradius’ Cash Management Software can be easily integrated with multiple data sources via APIs and sFTP. You can connect seamlessly with all banks, ERPs, and independent market data sources to process files in all formats, including XML, BAI2, MT940, ISO20022, XLS, and CSV. The best-in-class cash management solution offers major benefits, such as 

• Auto-classification of transactions based on bank, account, region, and category
• Visibility into bank transactions in customizable templates
• Access to HighRadius-provided independent market data from external sources
• Option for users to override or manually upload additional data as desired

You can also record and explore expected and actual transactions. HighRadius’ cash flow management software features a Cash Transaction Explorer that allows users to create cash or intercompany transactions and explore them with advanced search functionality. This feature allows you to:

• Easily create cash and intercompany linked transactions
• Use advanced search features to explore expected and actual activity
• Track intercompany summaries and detailed activities

By automating your cash flow management process with HighRadius’ Cash Management Software, you get a 360-degree view of company-wide cash positions. You can also check real-time cash positions across bank accounts, companies, pools, and currencies in user-defined worksheet templates with transaction-level drill-down capability. The software enables you to: 

• Access user-defined cash position worksheet templates that provide a company-wide view of finances
• Drill down into transactional details for each account
• Create recommended concentration and funding transfers

Reconciliation of previous day transactions is simplified with automated cash management. The solution auto-reconciles transactions based on standard and user-defined tagging rules while the rare exceptions are reconciled by creating transactions automatically or manually. Moreover, HighRadius’ automated cash management solution offers: 

• Auto-reconciliation based on user-defined and standard tagging rules within tolerances
• Updated account level status of bank connectivity and reconciliation
• Manual matching options for unreconciled transactions

You can also manage and track intercompany balances and notional pools with HighRadius’ Cash Management Software. It optimizes your cash flow management by allowing you to: 

• Automatically capture intercompany activities, track balances, and record interest across all mirrored and notional bank accounts.
• Automatically record all intercompany activities across actual, mirrored, and notional bank accounts
• Define intercompany accounts, track balances, and record interest

With global disruptions and uncertainties that can arise overnight, businesses need to be able to adapt quickly and stay ahead of the curve. You should embrace best-in-class solutions in treasury to safeguard your cash flow from the impact of high interest rates and inflation. By leveraging Highradius’ Cash Management Software to manage cash flows and their potential to enhance agility, businesses can future-proof themselves against unexpected challenges and seize new opportunities as they arise.