Businesses thrive on cash flow, not profit. Failure to understand and manage your cash flow can determine the success or failure of your company. According to a U.S bank study, 82% of business failures are due to poor cash flow management. Without positive cash flow, you cannot buy inventory, pay or hire employees or secure financing or a line of credit.
Positive cash flow helps insulate your business during struggles, downturns, or unpredictability. It is also a must if you want to grow your business and increase profits.
Cash flow is the measure of how much money is moving in and out of your business during a specific period.
As a business owner, you need to know exactly how much money your company is making and exactly how much money your company is spending. Why? Because having a clear and accurate picture of your financial situation will remove the guesswork and allow you to make informed decisions.
Effective cash flow helps you understand your company’s financial behaviour. In what months your company is generating more revenue, what months are slower. It helps you predict the ups and downs so you can plan and be conscious of your spending.
With the increasing complexity of operational processes, it is harder than ever to consolidate financial information. Regardless of your sector or industry, your business is most likely dealing with a large amount of financial data. This data originates from various sources such as accounting systems & ERPs, internal inventory systems, Customer Relationship Management software (CRMs), several bank accounts, spreadsheets, etc. All of this information contributes to building the financial picture of your company.
The challenge then becomes consolidating all of the information. Most companies calculate cash flow in one of three ways:
The most common complaint coming from business owners is lack of time. Keeping track of all the operational transactions in a business is extremely time-consuming. As a business owner, you would rather focus your time and energy on growing your business, building relationships and increasing sales wouldn’t you?
We understand this. That is why we created SmartConcil, a tool that simplifies your cash flow management. Acting as a connector, our software easily integrates with the internal systems your business uses (accounting & ERPs, internal inventory, CRMs, national & international bank accounts, spreadsheets and more), allowing your business financial transactions to flow and be reconciled automatically.
An automated process guarantees information integrity and reliable financial reports on time.
Learn more about our cash flow management tool on smartconcil.com.
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