Three Ways to Better Manage Cash Flow

Published: May 24, 2022

As the pandemic continues to disrupt how companies do business, it’s even more critical for leaders to have access to accurate cash flow projections.

The pandemic shed light on major weaknesses in the ways companies predict their cash positions. These include lack of access to a complete view of data, as well as limited analytics for making cash flow predictions based on historical activity.

To combat these challenges, many finance teams are embracing new forecasting solutions that use machine learning to harness data and improve confidence. Empowered by treasury digitisation, companies can better predict future cash needs without significant manual efforts or costly technology investments, both of which have been major pain points for middle market companies.

The following are three ways companies can immediately improve cash flow processes and help grow their business:

According to Bank of America research, most companies currently perform their cash forecasting on a spreadsheet. This is an enormous manual task that produces forecasts that are often outdated by the time the report is complete. Adopting digital tools can help accelerate the process of cash flow projections while increasing the accuracy of future predictions. As the economy enters an environment of rising interest rates, the ability to manage working capital will become even more critical, making the investment in cash flow projection tools all the more essential.