U.S. tech companies and startups have had a whirlwind of a week to say the very least. Our hearts go out to each and every startup founder and employee who had to deal with the uncertainty around the status of their funds and what the SVB collapse would mean for the future of their business.
We were able to take a collective sigh of relief when yesterday, U.S. regulators announced that all depositors at Silicon Valley Bank (SVB) would be granted access to the entirety of their funds in the failed lender. This morning, President Joe Biden said that Americans “can have confidence that the banking system is safe,” in the wake of the collapse of Silicon Valley Bank and Signature Bank.
With two major U.S. banks failing last week, all companies must be vigilant and take a proactive strategy to safeguard their liquidity during these uncertain times.
In this article, we’ll share a round-up of our best cash management tools, articles, and resources so that you can:
- Determine exactly where you stand in terms of cash and cash flow
- Conduct strategic planning and analysis to overcome cash flow-related problems
- Implement the right liquidity management strategy and de-risk your startup
Trovata Bank API Connection & Risk Monitoring Tool
Trovata has the largest library of corporate banking APIs in the world. We use direct bank APIs for balances, transactions, and payments to power our multi-bank, automated cash management platform.
Given recent events, we’re making a portion of our corporate banking API library publicly viewable as a live bank connection monitoring tool.
We’ll classify banks by their current level of connection risk, updating daily.
Connection risk levels are based purely on Trovata’s monitoring of corporate banking APIs. Our Operations team constantly monitors the status of each of these connections and any risks to uptime.
Cash Reporting and Analysis Resources
Teams who do not have a daily view of their cash flow and position may be unable to adapt their cash flow management strategy quickly enough to respond to unexpected changes in cash flow.
Therefore, it’s critical to be able to have the resources on hand to easily report on cash to properly analyze it.
Here are some of our best resources pertaining to cash reporting and analysis:
How to Streamline Multibank Cash Management in 2023
Research shows that nearly half of multinational corporates deal with hundreds of bank accounts, while over 10% attempt to manage more than 1,000 bank accounts.
Understanding how to improve your organization’s multibank cash management is crucial for success. With so many accounts and multiple banking partners, effectively managing cash positions and bank interactions becomes increasingly challenging.
Read this article on multibank cash management to learn:
- The benefits of optimized multibank cash management, such as risk mitigation
- Challenges that come with managing multiple banking relationships
- Ways you can overcome the challenges
Read the article: “How to Streamline Multibank Cash Management in 2023“
What is Cash Burn?
Cash is the fuel that keeps businesses running. Whether it’s through cost of goods sold, payroll, or marketing budget, every company spends money to operate and grow.But what if you spend too much?
Read this article on cash burn to learn:
- What is cash burn?
- Gross burn rate vs. net burn rate
- How to calculate net cash burn rate
- What’s a good cash burn rate?
- How to reduce cash burn rate
Read the article: “Cash Burn – What It Is & How to Manage It.”
How to Build a 13-Week Cash Forecast in 6 Easy Steps
A mission-critical financial report, the 13-week cash forecast can help you can ensure that you have enough cash on hand to cover your operational expenses and prepare for the unexpected.
Read this forecasting article to learn:
- The benefits of creating a 13-week cash forecast
- Why teams fail to properly forecast cash
- How to generate a 13-week cash forecast
- Why better cash insights drive better decisions
Read the article: “How to Build a 13-Week Cash Forecast in 6 Easy Steps.”
6 Best Practices for Building an Accurate Cash Forecast
A cash forecast helps set the trajectory for future business operations. The better the forecast, the more accurately a business can plot its way forward. It allows insights into potential cash-flush positions or areas where cash flow might run thin so you can better plan potential investments or loans.
Read this article to learn about these best practices for improving your forecast:
- Pick the right time period
- Streamline forecasting through automation
- Forecast potential market swings
- Create consistent reporting
- Focus on working capital
- Allow open discussions
Read the article: “6 Best Practices for Building an Accurate Cash Forecast.”
The Ultimate Guide to Cashflow Forecasting for Startups
The key to extending your runway? Cash flow forecasting. With a clear picture of how each action you take today affects your finances tomorrow, you’re no longer walking blind.
While cash flow forecasting is one of the most important things you can do for your startup, it’s a big topic.
In this guide, we’ll break it down for you.
Read this article to learn:
- Why forecasting is a non-negotiable for startups
- How to perform a cash flow forecast
- Tips to enhance your cash forecast
- Common mistakes to avoid
Read the article: “The Ultimate Guide to Cash Flow Forecasting for Startups”
Strategic Planning Resources
Strategic planning is how you can ensure you have allocated the right amount of cash across different accounts and areas of your business to keep it running properly at all times.
3 Keys To Conquering Strategic Planning As A CFO
When you request reports to guide strategic planning as a CFO, does it take your team hours of manual work? If so, chances are it’s not due to your team’s work ethic; their abilities are being limited by legacy technology.
In today’s market, agility is valuable. Looking at the beginning of the pandemic, the most successful companies were able to pivot their go-to-market and cash strategy swiftly. If you are going to conquer strategic planning, your organization needs the right tools and processes in place.
Read this article to learn how you can lay the groundwork for strategic planning:
- Democratize your financial data
- Leverage new technology to discover new cash flow insights
- How to successfully transition to digital transformation
Read the article: “3 Keys To Conquering Strategic Planning As A CFO.”
Treasury Management Strategies In An Uncertain Market
During the pandemic, companies with an adaptable treasury management strategy withstood poor economic conditions better than their competitors.
Given today’s uncertain market, now is the time for companies to build a strategy that will see them through any economic conditions.
So, what are some successful strategies you should consider?
In this article, learn about three key aspects that can contribute to a successful treasury management strategy:
- Embrace treasury management automation
- Improve cash forecasting accuracy through transaction tagging and machine learning
- Regularly review treasury management assumptions
Read the article: “Treasury Management Strategies In An Uncertain Market.”
How the COVID-19 Pandemic Demonstrated the Importance of Scenario Planning
When the COVID-19 pandemic broke out, the preliminary response from businesses was one of survival, focused on freeing up cash to cover operating expenses. Many organizations took drastic measures such as reducing their capital expenditures or even temporarily closing their businesses.
What did we learn then that applies to now? The importance of being proactive and data-driven when it comes to cash management.
By performing scenario planning, you can ensure your organization is prepared for any disaster scenarios and has a strengthened cash management strategy that can take on the toughest unexpected challenges.
In this article, you’ll learn:
- The effects the COVID-19 Pandemic had on corporate cash flow management
- How to boost your company’s ability to overcome cash challenges
- How to gain a competitive edge with scenario planning
Read the article: “How the COVID-19 Pandemic Demonstrated the Importance of Scenario Planning.”
Liquidity Management Strategy & Execution Resources
Okay, now you’ve got your arms around cash, here are some strategies and execution tools to carry out your strategic plan.
The Startup Recession Survival Guide
Recently, we’ve seen a shift in VCs’ attitude from caring about growth projections to caring more about profitability, given how uncertain the economy is. And, in light of the SVB collapse, VCs are urging their portfolio companies to diversify their deposits into multiple banks and accounts.
Given these two changes, startup founders and CFOs have to change their cash management approach.
Read this article to learn six essential ways to help your startup survive a recession:
- Focus on the fundamentals (how will you be profitable?)
- Remain Flexible
- Aim for sustainable growth over “growth at all costs”
- Fortify your work culture
- Extend your cash runway
- Automate cash flow management
Read the article: “The Startup Recession Survival Guide.”
How to De-Risk Your Business in Today’s Economy
Times are changing, and it’s no secret that the current economic downturn is taking a toll on startups. Founders are forced to find innovative ways to keep afloat in rough waters, where many assume that venture capital funding is few and far between. But is it?
In this inaugural episode of Fintech Corner, host and Trovata CPO, Joseph “JD” Drambarean, and Brett Turner, Founder and CEO of Trovata, discuss some of the headlines and topics that are on everyone’s mind right now in fintech and entrepreneurship.
Listen to this Fintech Corner episode to hear:
- Brett’s tips for de-risking your startup and what founders should be doing right now
- Lessons learned while raising Trovata’s Series B round
- The importance of having a financial operating plan to fight uncertainty
Payment Processing 101: How Open Banking APIs Simplify Payment Operations
It’s clear that now is the time to find any ways to save on operational costs in your business. One area to evaluate is your payment mix.
Fortunately, by developing open banking APIs, banks have built more secure, faster bank rails, enabling businesses to digitally transform with new, robust technology.
Read this article to learn about what’s new in payment technology:
- Now you can leverage individual transactions and bi-directional processing to empower greater transparency and scalability
- New banking rails upscale existing payment methods like ACH, wires, and book transfers and enable new payment methods, like Real-time payments (RTP) and bulk payments
Read the article: “Payment Processing 101: How Open Banking APIs Simplify Payment Operations”
Liquidity Management: 3 Strategies to Provide Bottom-Line Value
If you can manage liquidity effectively, then you can build a strong foundation for competitive growth.
Much of the challenge in accomplishing this is achieving cash visibility across various accounts and currencies so you can have a complete picture of your company’s financial health.
You need this real-time view of your company’s financial health to best adjust your strategy based on external factors like interest rates, fiscal policy, and foreign exchange rates.
Read this article on liquidity management strategies to learn:
- How to develop a strategy that fits your company
- Factors that will influence your strategy
- The three important liquidity management strategies to know: physical concentration, notional pooling, and overlay structures
Read the article: “Liquidity Management: 3 Strategies for Bottom-Line Value.”
Diversification is Key
No matter what happens in the economy, cash will always be king, so make sure you have a plan to properly monitor and safeguard it as the market goes up and down.
An important takeaway from the Silicon Valley Bank failure for startups is the importance of diversifying not only your investments but the banks you partner with to hold your deposits. Having a mix of accounts at different banks will be one of the key ways to future-proof your liquidity management. By diversifying where you hold your cash, you can minimize the potential impact of a bank run.