How to Improve Profitability by Cash Flow Management

Cash flow management: All you need to know

What is cash management?

Cash management involves managing cash flows from these three activities of a company:

• Investing
• Operating
• Financing

It is a vital aspect of an organization’s financial stability in business. A business may become non-solvent due to poor or inaccurate cash management.

What are the functions of cash flow management?

Cash management goals include:

• Meeting working capital needs
• Managing unstructured expenses
• Planning capital expenditures
• Ensuring optimal fund usage and investments

The role of cash flow management is to:

• Keep track of a company’s cash flows:
  A cash management system helps track and report company cash flows. It helps manage cash flows between several company branches and bank accounts.
• Manage excess cash:
  Many companies cannot track and manage excess funds due to a lack of visibility of global cash flow. A cash management system helps utilize surplus funds to increase returns on accretion.
• Avoid fraud:
  Security is a key concern when dealing with cash. Data theft and fraudulent transactions are quite likely in the treasury. Hence companies should address them in advance. This is possible with cash management software to improve risk management.

Why your enterprise needs a strong cash management solution

Why is cash flow management important?

Businesses need a future-proof cash flow management system to get real-time visibility. This is possible by automated gathering from various financial systems. Enterprises need automated cash management technologies to manage intercompany balances and notional pools.

Furthermore, a cash flow management system helps reduce the challenges faced by enterprises.

Problems faced by enterprises due to inaccurate cash flow management

A day in a life of a treasury analyst looks like this:

This often leads to inaccurate cash flow management due to the possibility of human errors. Moreover, the reports sent to the managers have errors that affect decision-making.

What are the best tools for managing cash flow in business?

Today’s treasurers are looking for solutions that are both comprehensive and flexible. A cash management solution (payment factory) helps centralize, automate, and streamline payments.

An automated cash flow management system is helpful for:

How an automated cash flow management system helps improve profitability

How cash management solution adds value to your enterprise

Cash management applications help the treasurer identify potential cash gaps and improve strategic planning. The following are the benefits provided by cash management solutions:

• Improves centralization in treasury:
  Automated cash management systems remove the obstacles of dealing with many banking interfaces. Cash management automation integrates with all banks, ERPs, and independent market data sources. It also processes files in various formats, including BAI2, MT940, ISO20022, XLS, and CSV.
• Simplifies the process of managing cash flows:
  Cash management automation performs manual tasks and saves a lot of time. Thus, employee productivity increases. Cash flow management software also automates the reconciliation of transactions and bank statements.
• Displays timely and accurate data:
  It provides continuous data access through a single dashboard view of cash across multiple:

• Geographies
• Bank accounts
• Entities
• Currencies

• Provides a scalable and secure platform with comprehensive features:
  Cash management software offers rapid deployment. It allows self-serve, so users don’t need any IT interference. It also lets users choose whether to load data manually or automatically.
• Increases the capability to make more informed decisions:
  It improves C-suites’ decision-making abilities by the capacity to obtain real-time cash positions. Thus, treasurers/CFOs can use idle cash and improve the bottom line.
• Ensures business continuity:
  Cash management automation tracks the cash in transit and the status of cash holdings. So, it ensures that a business can continue to run with more profits.

Get in touch with our solution experts today to learn how to automate cash flow management.