For companies today, effectively managing money can be one of the hardest things to do. And although there are plenty of businesses that are considered viable and profiting, they still have problems because money coming in, and money going out is not accounted for (tracked). Thus, cash flow management tools have become an option for businesses, both large and small in size, to help them better understand their financial standings, plan for expenses, and avoid issues with cash flow through the use of tools such as cash flow forecasting systems, cash flow management software, and invoicing automation systems.
If you have an eCommerce store, are a freelancer, have started a new business, or run a large corporation, you can benefit from the advantages offered by cash flow management tools to make sound financial decisions. In this article, we will look at some of the most popular cash flow management solutions on the market today, as well as their associated features and benefits, and how they improve company’s financial health.
What Are Cash Flow Management Tools?
In general, cash flow management tools are computers/programs used by business managers and owners to monitor and control the flow of cash for and from their companies. They assist businesses in tracking such things as income, expense, invoices, payroll, taxes and financial projections.
In addition to assisting with the regular monitoring of the company’s cash, most cash flow management tools available today also have the ability to automatically generate reports and other documents such as invoices; provide access to real-time data; offer business intelligence; provide integration with accounting software; and provide management dashboards; and provide “next level” ability to budget, to forecast, and to do all of the above in one place. Using a cash flow management tool gives companies, through the use of automation, the ability to eliminate the errors associated with data entry and improve the length of time that it takes them to produce reports.
Why Businesses Need Cash Flow Management Software?
Poorly managed cash flow is among the most common causes of business failure today, as businesses often generate revenue but experience cash flow difficulties due to long payment cycles, increasing costs of goods/services sold, and/or inaccurate financial projections.
Using a sound business cash flow software solution also provides business owners with numerous benefits, including:
- Increased visibility into their finances
- Improved accuracy of budgets/forecasts
- Streamlined invoice tracking
- Decreased number of manual accounting errors
- Up-to-the-minute expense tracking
- Simplified tax preparation
- Enhanced ability to make decisions
Additionally, businesses that utilize cash flow tools will be better prepared to deal with seasonal fluctuations or unexpected expenses, as well as changing economic conditions.
-
Intuit’s QuickBooks
QuickBooks is the most popular small-medium size business accounting software in use today. Automated expense tracking, invoice generation, cash flow forecasting/management, payroll processing, and tax reporting are all found in one software package.
QuickBooks has a real-time cash flow dashboard which allows business owners instantaneous access to track their income and expenses at any time. It also integrates with banks and payments processors for quick and easy transaction reconciliation. QuickBooks is an excellent option for start-ups, freelancers, and small businesses, as it provides an all-in-one accounting and cash flow management system.
2. Xero
Xero is a cloud-based accounting platform that provides businesses with an easy-to-use interface and automated features. Businesses can utilize this software to not only keep track of their business expenses but to also create and manage invoices, reconcile their bank transactions and monitor their cash flow in real time.
A significant benefit of using Xero is its ability to integrate easily with many third-party business applications such as payroll, inventory, and CRM systems. Therefore, for businesses that want to use a scalable cloud-based cash flow solution, Xero’s flexibility makes it one of the most popular solutions in this area.
3. Float
Float emphasizes the importance of creating accurate forecasts and financial plans. To do this, Float works directly with accounting packages such as QuickBooks and Xero to deliver accurate projections in real time.
Float can help users visualize their future cash flow and also help them project what their future expenses will be; this may make being prepared for upcoming expenses much easier for these businesses. Float is an excellent tool for agency-based businesses, startups and any business with a cyclical revenue stream.
4. Pulse
Pulse takes a minimalist approach to tracking business finances. The Pulse system assists companies in forecasting their income, understanding their income streams, and tracking their anticipated future liabilities.
The Pulse accounting software is simple to understand and can be used by a small business owner who would like to track his or her business finances easily, without having to deal with a complex accounting software program.
5. FreshBooks
FreshBooks is one of the leading accounting software options for freelancers and service-based businesses because of its invoicing, expense tracking, project accounting, and ability to send payment reminders.
FreshBooks helps a company manage their cash flow better and get paid quickly. FreshBooks also provides companies with easy access to their financial data and allows them to keep all of their financial records organized and easy to find. In addition, due to its mobile features, users can manage their finances no matter where they are located.
6. Wave Accounting
With a free cash flow tool like Wave Accounting, small businesses and freelancers will have everything they need to start accounting and invoicing. Essentially, Wave gives users all of the tools to perform these tasks without any upfront costs or monthly subscription fees.
Wave is an excellent cash flow tool for startups because many businesses start with a limited amount of cash. Therefore, a business can track their finances with minimal costs.
7. Sage Intacct
Sage Intacct is a financial software solution that has many features for both midsized and enterprise-level companies. Some of the features available through Sage Intacct include financial automation, multi-entity accounting, budgeting, and AI-powered analytics.
Sage Intacct is used by larger organizations that need to manage a complex financial environment and to have greater detail on their performance, particularly when preparing for large-scale cash flow performance and reporting.
8. PlanGuru
PlanGuru is a unique financial software package designed specifically for budget preparation as well as long-term forecasting. PlanGuru can be used for many different forecasting techniques, but primarily utilizes predictive analysis and strategic planning.
Company owners can develop detailed financial models of their operations and to simulate the potential for growth in the future. PlanGuru is commonly used by financial consultants and business planners.
9. Cash Analytics
CashAnalytics provides enterprises with cash forecasting and treasury management capabilities. Large companies use CashAnalytics to track and report on cash flow from multiple departments and locations and as a centralized location to manage their cashflow visibility.
The ability to integrate with ERP systems makes this software an ideal resource for businesses around the world managing complex financial operations.
10. Fathom
Fathom takes your accounting data and creates visual financial insights. Using advanced reporting capabilities, Fathom allows you to create KPIs, forecast future sales, analyse profits, and build custom reporting dashboards. Fathom helps businesses that rely on data for financial decisions make informed choices by providing them with sophisticated reporting capabilities and performance analyses.
How Do I Choose the Right Cash Flow Management Tool?
It is important to consider the size of the business, the budget of the company, and the financial complexity of the business when selecting the right cash flow management software.
Small business owners and freelancers typically focus on affordability and ease of use when selecting cash management software. Therefore, QuickBooks, FreshBooks, and Wave are great solutions for these types of businesses. Mid-size companies would generally be interested in cash flow management tools with advanced forecasting functionality, such as Float and Fathom. Large corporations typically require advanced treasury management solutions, such as Kyriba or Microsoft Dynamics 365 Finance, to effectively manage their cash as well as manage their accounts receivable.
Before you make a selection, take the time to evaluate the following attributes of any cash flow management software you are considering:
- Compatibility with other software
- Ability to forecast
- Automation capability
- Price structure
- Quality of reports
- Scalability
- Accessibility from mobile devices
The best solutions should make performing financial operations easier, instead of making them more complex.
Conclusion
In conclusion, it is important to manage your company’s cash flow to ensure you can operate successfully and grow into the future. The right tools for managing cash flow will help your business to have clear visibility over your finances; automate processes; improve your ability to accurately forecast; and make informed strategic decisions.
Investing in a cash flow software solution that is right for you will enable you, whether you are an independent contractor, a startup owner or an enterprise-level finance manager, to improve your company’s financial performance through increased productivity, and therefore, ultimately decrease your company’s risk of failure.
There are a wide range of cash flow solutions on the market today, from entry level solutions like Quickbooks and Wave; to mid-tier solutions like FreshBooks; to enterprise level systems like Kyriba and Microsoft Dynamics 365 Finance.
FAQs
What Are Cash Flow Tools Used For?
Cash flow tools provide businesses with the ability to track revenue in/out; forecast future cash flows; create/manage invoices; and create budgets and improve budgeting. Cash flow tools also allow you to create reports to better inform you on decisions regarding your business’s cash flow situation.
What Is The Best Cash Flow Tool For Small Business?
The most popular entry-level cash flow tools for small businesses are Quickbooks, Freshbooks and Wave, as they are user-friendly and provide reasonable pricing.
Are Free Cash Flow Management Tools Reliable?
Most free cash flow management tools, such as Wave Accounting, provide accurate financial advice that is based on a complete understanding of all aspects of the financial life of a business, including the ability to accurately forecast.
Also Read:
