Consulting Services, Technology Services Cash Flow Management in the Cloud
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During a time of crisis, many organizations are forced to shift their perspective on cash flow. Rather than focusing on how to make a profit, businesses begin identifying potential challenges, measuring impacts, and implementing strategies to improve their cash flow position. In performing these activities, an organization may find that their current systems do not adequately support tracking and reporting on cash flow activities. The selected option is often to turn to Excel in order to quickly address a given tracking or reporting problem, in this case general cash flow. However, Excel comes with its own roadblocks and limitations.

As organizations move from crisis survival mode to recovery and beyond, it is important that the right systems are in place to facilitate tracking and reporting on cash flow for long-term business continuity. The recovery phase is a good time to begin evaluating legacy accounting systems that do not fully support integrated cash flow management. Questions asked during this evaluation should include:

  • Can I get a complete picture of my cash footprint and working capital?
  • Can I see cash across multiple entities, currencies, or books?
  • Do I know the origin of my cash receipts?
  • Do I know the destination of my cash disbursements?

Cloud financial management solutions are providing organizations the flexibility and scalability to better manage operating cash flow. Through the use of a best-in-class solution, such as Sage Intacct, organizations are able to strengthen controls around cash, accelerate processes surrounding the movement of cash, and gain better visibility into cash position.

Controls around cash are important for any organization, especially during times of crisis. Cash controls include managing and monitoring cash allocation and disbursement practices, the invoicing cycle, as well as credit and collection policies. Without adequate controls, businesses will find it difficult to survive and even more difficult to thrive. Robust financial management systems help support strong controls by automating complex cash management processes and providing an inherent audit trail for all activities. Sage Intacct financial management specifically addresses this by allowing organizations to create automated, configurable processes surrounding customer invoicing and vendor payment functions:

  • Approvals are aligned with the organization’s operations, which allows for additional visibility within the order to cash and/or procure to pay processes without the need for manual paper pushing.
  • Powerful dashboard capabilities enable quick insights into organization-wide customer or vendor histories and aging balances, allowing businesses to review and respond quickly.
  • Automated bank reconciliations further empower organizations to identify exceptions, manage bank errors, monitor for fraud and maintain accurate cash balances.

It's important to understand if the systems in place before the crisis will enable the organization to move forward into recovery and growth for the future.

At the end of the day, visibility into the entire cash management process equips organizational stakeholders to make decisions about whether to make a change or stay the course. While Statements of Cash Flow are the popular method to report on net operating cash and other cash flows from financing and investing activities, dashboards are becoming the preferred method to communicate cash position through the use of visual representations and metrics. Clearly-displayed metrics such as debt-to-equity ratio, days sales outstanding (DSO), and days payables outstanding (DSO) provide stakeholders with the ability to assess both the short-term financial health of the organization and the organization’s ability to meet long-term needs. Not only is it important to see this information for a single entity, but also across the entire organization. A financial management system that supports a unified multi-entity environment provides this capability by allowing a top-down view of organizational metrics as a whole, a selected entity, or even a given location in real-time.

As organizations move from crisis to recovery, it is important to understand if the systems in place before the crisis will enable the organization to move forward into recovery and growth for the future. In considering new financial management software, support for integrated cash flow management should be top of mind. Best-in-class cloud financial management systems help organizations strengthen cash controls, accelerate processes surrounding the movement of cash, and gain better visibility into cash position.

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