Things to Consider When Adopting a Cash Flow Management System

Eric Weynand, Founder

Are you still running your business using the ‘bank account relativity theory’? Bank account is fat? Hire, buy, invest, spend. Account balance getting low? Cut back, trim costs, ‘OH NO! I have to fire that salesperson I hired 3 months ago’. You’re not alone – this is a common, but dangerous approach.

You need a cash flow management system to easily and accurately determine your cash position today and in the future. With all of the tools available, it can be hard to determine which one will best fit your company’s needs. Use these top 5 most important factors to consider when making your decision.

Know Your Business Needs.

When selecting the best system for your company, you’ll want to select one that offers features you need for the immediate and short term future. If your business has a long collections cycle, you may want a system that can help forecast multiple payment scenarios. If you find that you’re checking your financials on the go, opt for a system that is mobile-friendly or syncs online and offline data.

Levels of Reporting.

To get the most out of your cash flow management system, you’ll need one that enables you to see multiple levels of data. The best systems will show you a dashboard for a quick view of your cash position, and then drill down into the details for more analysis.

Anticipate Needs.

A good system will allow you to make informed decisions today about your business’ position in the future. You’ll want to select a system that gives you confidence that you have all of the data needed to make these decisions accurately. Look for a tool that specifically indicates that it includes budgeting and analysis features.

Interface Usability.

Having a complete system is great, but you want to make sure that you and your team are comfortable using it. Some tools have a steep learning curve that make them harder to adopt. Look for an intuitive system that allows for customization based on your needs.

Integrations with Other Tools.

The best systems will integrate all of your accounting and sales tools into one view, providing you with accurate and actionable results. Integration with your accounting software is an obvious choice, but integration with your CRM software provides an additional layer of information that can improve accuracy. By linking your CRM software, you’ll be able to see what jobs you have in the pipeline and how they could affect your future cash flow position.

If you look for a system that meets all of these requirements, you can have confidence that it will help you make informed decisions about your business.

At PlotPath, we use a proprietary cash flow tool. During your search for the right system, be sure to compare them against ours.

Do you have anything to add? If so, contact us to let us know!