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Life, Nature, Inefficiencies and Cash Management

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Life is funny sometimes isn't it? You have a problem you're trying to solve, then ironically, or better yet fortuitously, an answer is dropped square into your proverbial lap.

This happened to me recently.

We have been unpacking a LOT of content into webinars and educational content recently. While thinking about the 1,000,000 pieces of content we still have yet to download from our collective brains right now (it's truly an amazing sight to be honest), one area has been top of mind of late: how do we best talk about and demonstrate eliminating redundancy?

Admittedly this likely isn't a show stopper for most people, at least at first sight. But for small business owners and professionals that serve them, it really should be.

Why?

Because time is extremely limited for small businesses and small business owners. Every ounce they can glean back is time they can reinvest in their business, their families or themselves. So if you can save any amount of time by eliminating redundancy, you are doing yourself a disservice by NOT looking into it more.

Inefficiencies In Cash Management

So why have I been so obsessed with this topic recently? Because in building out our education programs, one area of focus is on how inefficient the cash management process is, especially for small businesses and their advisors.

If you look at it from a high level, cash flow forecasting, cash management and cash planning are an integrated process:

  1. You create a cash flow forecast for the business
  2. To do so you need to collaborate and converse with various stakeholders
  3. Once the process is complete, you carry out your plan (aka cash management)
  4. This takes more coordination and collaboration
  5. You then review and reiterate

The above list is not exhaustive as I don't want to bore you to death in a single blog post, but I am sure everyone reading can appreciate that the terms "collaboration" and "coordination" aren't single step actions.

Collectively they require a lot of back and forth, a lot of approvals and a lot of paperwork. And as the number of people in the process increases, the complexity expands.

Take a very simple payment workflow with a bookkeeper, controller and manager involved as an example:

Here is a simple cash management workflow.

That seems like a lot of steps for something that should be as simple as "just do what we planned".

A Timely Insight From Nature

Fortunately for me, an article from Nature started circulating the interweb, along with related opinions. I saw these through several posts on Twitter and LinkedIn and started digging in more.

Credit where it's due to two of the posters:

  • Matt Putra, a fractional CFO with solid social skills
  • Ryan Lazanis, general cloud accounting god (check out his newsletter, it's amazing).

I really suggest you read the overview of the article. It's well written and has a great lego graphic (need I say more). To summarize it here:

  • We as humans have a bias to think of additive solutions as opposed to subtractive ones
  • This bias stems from several areas including:
    • Perception of subtractive solutions being less creative
    • Subtractive solutions being seen as ineffective
    • Sunk cost bias (you already put work into it, so keep building on it)

The end point of the article is that eliminating redundancies and inefficiencies can be a highly effective solution to a lot of problems, but we mere mortals need a cognitive nudge to consider them from time to time because it's simply not in our nature.

So... consider this a polite, Canadian nudge.

This is our friendly nudge to look at better cash flow forecasting and cash management processes.

 

Eliminating Redundancies In Cash Management

Let's walk back to that "simple" payment process I outlined earlier. We've highlighted redundancies in red. Remember, a cash plan was already made, so we just want to carry out the plan:

Here is our cash management workflow with redundancies highlighted in red.Could we make this process better? Could we eliminate some of the steps? Could we make a "simple" payment workflow that was actually simple?

Spoiler alert: the answer to these questions is a resounding "yes".

Integrated Processes Need Integrated Systems

Let's reconsider my earlier statement around our simple payment process:

That seems like a lot of steps for something that should be as simple as "just do what we planned".

The redundant steps we highlighted were largely centre around communication flows and duplication of information. The problem here is that professionals and businesses are trying to handle an integrated process with disparate systems. In the world of cash flow forecasting and cash management that means:

  • Using an accounting system like Xero or Quickbooks Online
  • Creating cash flow forecasts and cash plans in a spreadsheet
  • Using the accounting system to produce reports for a bill payment run
  • Using email to coordinate
  • Using a payment system to execute

All for a single aim.

To handle an integrated process efficiently, you need an integrated system to do so. An integrated cash management system, as an example, would tie in with your accounting and payments system and carry out action items for you. It would "just do what we planned".

With a tool like this in place our simple payment process would actually look simple:

Here is a much more efficient cash management workflow that can be achieved with Helm.Using some extremely light estimates, our time savings for just this section of the cheque run process (or check run process for our US partners) would be:

  • 5 minutes to produce an accounts payable plan
  • 10 minutes to communicate this plan
  • 5 minutes to enter this into another system

This doesn't include time savings around:

  • The cash flow forecast itself
  • Payment tracking and follow up
  • Reconciliations
  • Any lags for additional steps in any communication in the process.

Our Integrated System: Helm + Veem

The beautiful part is that integrated cash management systems do exist (well one at least đŸ˜‰). That means the streamlined payment workflow above, and its related time savings, is possible. Without knowing it, our team at Helm used subtractive thinking, and built an integrated platform with Veem.

Maybe not surprisingly, I often call it our "sleeper feature" because it's so easy to use, but carries so much efficiency and power. It makes scaling cash flow forecasting and cash management across a number of businesses or clients a lot easier. This makes it akin to a "sleeper car", or a race car that is extremely powerful, but unassuming.

So how do you use our Veem integration?

Once your cash flow planning is done in Helm, you literally just have to click a few buttons to carry out a fully automated payment run. And by fully automated we are not just talking about the payment itself, we are talking the whole business process from start to finish.

Here is an example of how easy it is to use the Veem integration in Helm for cash flow forecasting and cash management.The Helm + Veem integration:

  • Schedules all selected bill payments, even weeks into the future
  • Routes them through an approval process
  • Once approved, marks bills as being paid in your accounting system
  • Routes a bill payment to a clearing account (so with bank rules setup you can reconcile your bank and clearing account automatically)
  • Allows you and your vendors to track their payments in real time
  • Handles all your Know Your Client (KYC) requirements for you

If you could actually see it, I would say it's truly a sight to behold. But of course we are doing all of this behind the scenes for you, so you can't.

But as a user myself I will say that it's great not having to do accounts payable listings and clunky approval processes anymore. For our own business and our clients, we simply map out our cash plan for the next couple of weeks, setup our Veem payments, and set it and forget it.

Thanks subtractive thinking... hello, family time!



If you are interested in seeing Helm's integration with Veem a bit more in depth, watch this recent webinar we did called Kickstart Your Cash Management.

New to Helm? Book a demo with our sales team to see our amazing cash flow forecasting and cash management tool in action!

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