What is Cash Flow Management?
Cash flow is a blanket term to describe any money that goes in or out of a business over a specific period of time. Typically cash flow is measured at regular intervals, either monthly, quarterly or annually. The cash flow blanket covers all cash related activity including revenue, expenses, loans and investments. Proper cash management is crucial to the success of any organization. Not only is positive cash flow indicative of a strong business, but it is also an important signal to investors.
Save Time with Automated Cash Management Tools
“Companies pay close attention to their CF and seek to manage it as carefully as possible. Professionals working in finance, accounting, and financial planning & analysis (FP&A) functions at a company spend significant time evaluating the flow of funds in the business and identifying potential problems.” -CFO.com
Business professionals spend much of their time gathering data for, and creating reports. This is why Treasurers, Finance Professionals and Accounting Professionals are all seeing benefits from upgrading to automated cash management tools.
Tools for Mobilizing and Managing Cash Flow
Automated cash management tools can help cut down the amount of time it takes to gather, sift through and analyze cash data. Most business professionals know the routine well: visit bank portals, download CSV files, upload to Excel, standardize the data, rinse and report.
Open banking APIs have created digital bridges between banks and businesses, creating a shortcut for cash data collection. Trovata uses APIs to gather cash data across all banks and accounts, then leverages machine learning technology to standardize the data as it is collected. Business professionals are left with an easy to navigate dashboard that shows their cash position updated in real-time. In addition, Trovata includes a Google-like natural language search tool that allows users to search for transactions by name, or tag. Business professionals can then dig deeper, and easily analyze specific types of expenses or transactions. These tools allow business professionals to quickly answer questions about their cash position and cash flow.
Cash Flow Forecasting Tools
“A study done by U.S. Bank revealed that more than eighty percent of business failures are due to poor cash management.” –Washington State University
A cash shortage is exactly what cash flow forecasts seek to avoid. Forecasts allow business owners to plan for potential pitfalls and mitigate risk. Cash forecasting plays a crucial role in cash flow management, but is a highly manual process. The existing forecasting process takes too long and leaves business professionals spending more time generating reports than analyzing them.
Your digital cash forecasting toolkit includes machine learning, robotic process automation and open banking APIs. When combined they can automate much of the forecasting process.
But, how does it work? First, Trovata’s APIs collect banking data from across all banks and accounts. Then, robotic process automation creates a digital workforce that completes repetitive tasks like calculations and data entry. Trovata’s proprietary machine learning algorithms can then sift through the data and identify trends for the forecast.
Trovata’s forecasts are highly customizable and allow you to set the length of the forecast, set the variables and offer several different graphical displays.
Why Take Advantage of Cash Flow Management Tools?
Financial digital transformation has created a new toolkit for cash flow management. It is time to shift focus to analysis and strategic planning, and say goodbye to the days of endless Excel spreadsheets.
Trovata’s cash flow analysis tools are cheaper than traditional legacy systems, can be set up in just a few weeks (without the need for IT support) and can provide benefits across your organization.