Cash Flow Analysis Series

Written by Trovata Team
April 24, 2021

Whether it is a big corporation or small business, cash flow analysis is at the core of driving decisions that impact the success of your company.

Cash flow analysis determines your company’s working capital and helps businesses understand how cash moves in and out of an organization, powering better-informed decisions that support business operations. Closely examining how your business makes and spends money will help you understand what resources are available to run operations and complete transactions. 

Ignoring cash flow analysis can have dire consequences for small and large companies alike. In fact, according to SCORE, 82% of small businesses fail due to mismanaging cash flow.

Then take a look at the mega-million dollar start-up Stayzilla whose founder, Yogendra Vasupal, admits how neglecting the fundamentals of cash flow analysis undermined the success of his company.

But with the right focus on building out and making your company’s cash flow analysis smart and easy, you can unlock a lot of potential opportunities. For example, a start-up company like  Kindred Healthcare was able to expand after they identified opportunities for growth through their cash flow analysis; the team at Kindred realized it wasn’t from their profit where they could grow, but rather opportunities discovered through taking advantage of financing activities gleaned from cash flow analysis. 

In Trovata’s Cash Flow Analysis blog series, we’ve offered different insights and perspectives on cash flow analysis including answers to questions like:

Cash flow analysis is mission-critical to any organization.  Understanding the basics and incorporating some tips and tools can help even the savviest of financial professionals maximize how they evaluate their cash position.

A Treasury Perspective

From a Treasury perspective, cash flow analysis provides unique opportunities for insight into available cash, including all virtual and regular accounts, as well as assets and liabilities. 

Treasurers’ expertise in business cash management, along with their ability to access and evaluate historical and seasonal trends enables them to leverage their historical understanding of the business when building projections and forecasts. 

Part of the Treasurer’s role is to manage cash flow, identify new revenue streams, and guard against bad investments while building relationships with investors. With Trovata, up-to-date analysis allows Treasurers to act in both preventative and proactive manners when considering how to handle money.  

A Controller’s Perspective

With restrictions on workplace attendance, the roles of financial professionals have certainly changed, as has access to critical data that drives how controllers can successfully prepare and complete their reporting. 

Thankfully, controllers can use open banking technology for cash flow analysis to help them monitor transactions in real-time, from anywhere.

Trovata’s suite of automated cash management tools makes it easier than ever for controllers to instantly view their cash position, and manage cash flow with precision.   

Cash Flow Analysis Tips & Tools

It’s never too late to improve your company’s cash flow analysis processes. 

Cash flow analysis tips that can help save money include ensuring the accuracy of your cash flow statement, maximizing on collecting receivables, proactively managing payables, and preparing for cash shortages. It’s time to focus on the full image of your company’s financial position.

Using powerful tools like cash flow analysis ratios to manage risk and forecast the impact of major decisions is a critical way to ensure a healthy flow of cash into your business. 

Now What?

Like your company’s financial data, technology also changes by the minute. By keeping pace with digital transformation technology, financial professionals gain the ability to easily automate and execute real-time cash flow analysis.

Application Programming Interfaces (APIs) deliver real-time multi-banking data reporting which is crucial to accurate cash flow analysis.

Check out the Caruso Case Study to learn more about how Trovata’s use of patented API technology simplified the process of cash management onto a single platform.

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