Cash Management Software: What You Should Know in 2023

If you want to make sure your organization stays liquid and able to meet challenges day-to-day in a rapidly evolving business climate then you’re likely to want to make use of cash management software. Selecting and operating cash management software often falls within the scope of treasury management.

What Are the Types of Cash Management?

Two types of cash management are managing inflows (receivables) and managing outflows (payments). An individual may be able to do this in their head but for a larger organization—dealing with more than one payment currency, multiple banks and accounts (including virtual accounts), etc—this can get complicated. Which is where choosing the right software can help.

What is Good Cash Management?

Good cash management will help find the available money hidden in a company’s own balance sheet. By doing this, a cash manager will free up or eliminate the need for financial assets from other sources. There are challenges to good cash management:

  1. Forecasting quality directly related to time/effort to produce reports resulting in slow decision cycles.
  2. Poor data quality requires time-consuming data cleaning from banking sources.
  3. Report generation requiring manual financial data entry.
  4. Working with multiple currencies.
  5. Staying current with regulatory requirements.

When evaluating cash management software you’ll want to consider how each potential solution can improve your day-to-day life in relation to those challenges.

What is a Cash Management Platform?

A cash management platform is software designed to help companies with liquidity management. There are great variations in the way this software is designed and delivered including cash management solutions that are hosted on a company’s computers, platforms hosted on vendor architecture in the cloud, etc. Each system is designed around a core set of assumptions. How well your company maps to those core assumptions will determine whether the system is going to be a good fit.

At a basic level, all of the worthwhile options will help with receivables, payments, bank statement processing, and analyzing cash flow.

Evaluating Cash Management Software

Look for something that will improve efficiency without creating a security headache, improve visibility into company financial data whether it’s one business unit or the entire enterprise, and be flexible enough to help you meet current and emerging business challenges.

Key Questions:

  • Is the information real-time and accurate? Does it come from a bank API or is it loaded only at the end of the day?

  • Can the system grow with your future needs? As you expand into more banks, currencies, and accounts can the system keep up?

  • Does it handle a variety of types of data and can you organize it according to the needs of your business? Is it flexible in how data is organized so you can generate insights quickly without manual export-to-Excel workflows?

  • Is risk management taken seriously?

  • Is automation and standardization a core feature?

In order to spend more of your time increasing the liquidity of your organization and less of your time managing the software itself you want to be certain that the cash management software you select operates in real-time, uses a 21st Century data architecture for flexible finance dashboards/forecasts/reporting, security controls and risk management features, and automation that gives you your time back.

Flexibility as a Core Attribute

Many legacy solutions are based on inflexible database structures from the late 20th Century. These solutions work great for the companies that needed them in the 1990s. Today, however, many things work differently: bank data is available in real-time, it’s easier to establish a global footprint, and the finance leaders of today think cash management in fluid ways that yield deeply relevant insights for their companies.

As you evaluate cash management software you’ll want to know that this kind of flexibility is a key component of the software, not bolted on later or left for your IT department to sort out on their own, they have enough systems to manage already.

  • If you’re at an enterprise, can they integrate and maintain the solution with your banks? With your existing software?

  • If you’re at a mid-sized company does the software scale with your growth in bank accounts, currencies, and regulatory concerns?

  • If you’re in a small business can the software free up your time as well as your cash so you can concentrate on the next stage of growth?

  • Consider: What do you need now? What will you need in the future? Will the solution be flexible enough to grow with you? Because if you are successful at cash management you will be growing.

Please see our Resources for further information and insights. If you’re ready to starting working with software that incorporates flexibility as a core attribute, request a demo and one of our experts will show you how it works.

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