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What is Cash Flow Management Software

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If you’re facing uncertainty surrounding your cash balance, looking to spend less time in spreadsheets, and improve your financial management you may want to consider implementing cash flow management software

What is Cash Flow Management Software 

Cash flow management software is designed to manage all the in and outflows of cash through your business.

Generally, these apps integrate with your accounting software to pull financial data, vastly speeding up the data collection process that goes into managing and creating cash flow forecasts.

With this data, they can also automatically create forecasts, and make predictions based on your historical financial data. Together, this lets you confidently, and quickly see your future cash balances.

Why Should I Use Cash Flow Management Software?

We’ve already mentioned a couple reasons, but there’s many more benefits to implementing cash flow management software. Below is a list of benefits you could expect to gain while using cash management software.

At a high level, they combine to save time, provide confidence, and reveal insights and opportunities. 

Read more on leveraging the cash management process here.

The Benefits of Cash Management Software:

  • Ability to track bank accounts and balances

  • Eliminates the time, effort, and errors from manual sourcing data

  • Allows you to see your cash position with more precision (often down to the day), and accuracy

  • Greatly reduces the time spent creating a cash flow forecast

  • Lets you manage all your transactions in one place

  • Easy bill/payment and expenses tracking and planning 

  • Scenario planning to test different paths and decisions (ex: If inflation raises prices rise how will that impact our cash position? Can we afford to take on this project? What about a new hire?)

  • Alerts you to cash shortfall and surpluses 

  • Aides in budgeting

  • Aides in business planning 

  • Readily available and relatively cheap

Cash management also helps answer many operational questions like:

  • Can my team afford to take on this big project?

  • How is inflation going to affect my costs compared to this time last year? 

  • Can we hire a new staff member this quarter?

  • What happens if our biggest client pays late this month? 

  • Is it possible for us to delay a payment? 

How does Cash Flow Management Software Help your Business?

From the previous section you probably gathered that cash management software doesn’t necessarily - directly - make you money.

You can’t go out and purchase a subscription to a cash management app and - boom - instantly see your revenue spike.

However, that doesn’t mean businesses can expect zero ROI from their cash flow management software.  

Again, the benefits come from giving you the ability to see, in advance, upcoming shortfalls and opportunities.

To illustrate this let’s explore an example scenario. 

Example: How Cash Management Software can Help your Business 

Let's suppose a company has made a purchase of $5,000 from a supplier on credit with terms to pay within 60 days.

The supplier wishes to encourage early payment so they offer a 10% discount if the bill is paid within 15 days. 

Without Cash Management Software:

Typically if a company had no kind of cash management process in place or was using manual spreadsheet forecasting they'd try to pay around 50-60 days from now, or whenever they had available cash and no other bills due before. 

Why?

Because they either don’t know what their cash balance is going to be on a daily/weekly/monthly basis or it includes oversimplified and unreliable monthly averages that don’t accurately reflect the day-to-day bank balance.

It’s also just simpler to pay when you have the money and not think about it. 

Alternatively, they may pay earlier to try and take advantage of the discount without knowing how that would impact the ability to pay other bills. 

With Cash Management Software:

On the other hand, if they were using a cash management tool they would know with confidence what their cash balance looks like over the next 60 days before and after this purchase (and beyond). 

The business with cash management software in place would know whether they have the capability to take advantage of the 10%, and pay early, or if they should delay payment to prioritize other bills/projects. 

Proper cash management could save this company $500 ($5,000*10%) from this one bill alone, or prevent other even higher costs.

With cash management software costing roughly $50/month there is a clear return from this one transaction alone. 

What are the Best Tools for Cash Management 

The somewhat frustrating but truest answer is: the one that’s right for you. 

There are many cash management tools available on the market. The trick is finding the one with the right features to match your needs.

Luckily most of these tools have some sort of free version or trial period available letting you try them for yourself. 

Below we’ve included some top cash flow management tools/forecasting tools that can help manage your cash flow.

This list is in no way exhaustive, and you should always use the product that is best for your business.

Now that you are aware of the advantages of cash management, you’ll hopefully be able to better prioritize which benefits and features are most important to you.!

Top Cash Flow Management Tools/Cash Flow Forecasting Tools

 

Float

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“It’s crucial that you know what’s happening with your business’s cash.

Float is cash flow forecasting software that gives you the answers you need (and sometimes answers questions you didn’t know you had) with cash flow insights that combine your bills, invoices, and actuals with the budgets you set.

It even syncs with your accounting software to make managing your business easier.”

 

Helm

Helm lets you see your future cash position in real-time, so you can make confident business decisions without wasting hours planning in spreadsheets.

It syncs your data from Xero, Quickbooks, or Sage to create automated forecasts in minutes.

Track your bank balances, loans, accounts receivable and accounts payable all within Helm.

Plus test unlimited scenarios side-by-side to plan for every possibility and choose the best path forward.  

 

Cash flow tool

“The ultimate cash flow management & forecasting service”

“Instantly know your cash flow today and tomorrow.”

 

Cash flow frog

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“Planning to grow your business? Our cash flow planner app takes all the guesswork out of how to grow and how to fund that growth.

You’ll be able to track cash flow by class, forecast future cash flow months or years into the future, and map out how your cash flow will be impacted by multiple possible scenarios, all without changing the numbers in your accounting software.”

Learn More

Like we said there are many tools out there, explore them to find the one that's right for you!

If you’d like to learn more about helm you can watch a quick 4 minute overview here, or book a demo here.