Did you know that a healthy and profitable business can easily go bankrupt? In fact, Time reported that 25% of small businesses fail because of a lack of proper cash flow.
Cash flow reporting is an essential component to analyzing the overall financial position of a company. Without an understanding of cash, a small business will not have an accurate financial picture and will be unlikely to identify major pitfalls ahead (i.e., shortage of cash, increased payments going out to suppliers).
So if cash flow is so important, then why do so many entrepreneurs and small business owners fail to analyze cash? One of the primary reasons is that it’s hard. A cash flow statement and cash flow forecast report are not easy to develop. This type of report combines a number of different inflows and outflows from operations and any small missing item can lead to a major discrepancy in the data. However, there are technology companies on the market that can help businesses satisfy this need. The following are 4 technologies that can integrate with your accounting system and help a company with cash flow reporting:
As a small business, if you need a complete reporting platform for your company, Spotlight is an excellent choice. The various modules of this suite (reporting, dashboards, forecasting and multi) provide a business with the opportunity to make informed decisions now and based on future data.
It’s great to know how your cash inflows and outflows performed during the last quarter. But when it comes to cash, forecasting is crucial. What about the upcoming quarter? What if you land that new contract? When will you see the cash from the new deal? And, what additional expenses will you have to incur in order to get the project moving?
Spotlight’s forecasting module allows a business owner or CFO to build forecasts based on a variety of scenarios. Scenarios allow a business leader to play with data and determine how a major contract or large expense impacts cash flow.
Being able to see your business performance with a snapshot can be critical in a business practice. Sometimes, there is so much information about the company’s cash flow, that using technology is almost a requirement to ensuring you process all of the information. Fathom provides a way to consolidate information and create dashboards and metrics that the company can analyze. In fact, the company has a cash flow tool that helps a business owner visualize data for date ranges.
In addition to cash flow, Fathom is great for benchmarking. Have you ever wondered how your cash flow compares now versus last year? What about a picture of this year’s P&L compared to last year? Fathom integrates with your financial system (QuickBooks, Xero and even Excel files) to ensure you have the latest information available.
Updating spreadsheets to create a cash flow forecast can be tedious and fraught with errors. One data entry error and it might seem like you’re flushed with cash! Like some of the others listed in this article, Float software drives its reports from a company’s accounting platform, so it eliminates manual updating. This means your forecast is always up to date and you are looking at real-time data.
Float’s focus is actually on cash flow forecasting and presenting the information in an interactive environment. The platform allows you to build different budgets and compare your actual cash position to estimates. In addition, the platform allows you to add notes to various data elements. So, if you’re trying to determine why you decreased the cost of something in a given month, these little footnotes help you remember.
If you’re a small business owner, Grow is a great tool to help you unlock the power enterprise-level business intelligence. Grow provides over 150 integrations out-of-the-box and can pull in financial data, marketing data and pretty much anything else you can identify. So, if you’re wondering how certain marketing activities impact cash flow, then Grow might be a great option for analysis.
Grow provides executive dashboards, marketing dashboards, sales management dashboards, investor dashboards, sales leaderboards, support dashboards, financial dashboards, operations dashboards, and HR dashboards. These different dashboards give top level views of the status of multiple facets of a business. By using Grow, you can work with cash flow reporting and perhaps take a deeper dive into other aspects of your business.
Ultimately, cash flow can be hard to manage and analyze. However, with the adoption of one of these types of technologies, your business can start to analyze cash flow in real-time. Remember, it’s often difficult to get working capital in a crunch, so avoid disasters by getting a clear picture of the road ahead.