Matching the Cash Management Needs While Experiencing Business Growth – Are You Covered?
Is your business growing so fast that your current cash management solutions are holding you back?
Do you want to ensure you have enough working capital to fund your business operations and achieve financial stability?
If so, you’re in the right place.
Over two decades, I’ve worked as a chartered certified accountant and cash flow specialist, helping businesses across various sectors—from dental practices to retail, e-commerce, art galleries, and marketing agencies—achieve annual revenues of up to £53.8m.
Maybe you operate with multiple bank accounts or entities and struggle to keep track of cash movements. As a consequence, a total cash position might be hard to achieve.
Perhaps you are experiencing a lack of visibility in your cash position, leaving you relying on gut instincts instead of financial facts.
Possibly you struggle to collect payments on time with a growing pile of accounts receivable.
Or, you may be experiencing difficulty making informed financial decisions due to unpredictable cash flow.
Here’s the thing.
From what I have seen over the years, manual processes and spreadsheets might have worked in the past, but as your business grows, they become time-consuming, error-prone, and a significant obstacle to scalability.
So, what is the solution?
Cash management software that provides cash management solutions. It offers the speed, accuracy, and real-time information you need to make informed decisions based on facts, not guesswork.
Key Takeaways
- Cash management software is not just for large businesses. Even small and medium-sized businesses can benefit from using cash management software to automate tasks, improve forecasting, and gain insights into their financial data.
- Cash management software can help businesses make better financial decisions. By providing real-time visibility into cash flow, cash management software can help businesses make informed decisions about their spending, borrowing, and investing.
- Prioritize features that address your specific business needs over fancy features you won’t use. Cash management software offers a variety of features, so it’s important to choose a solution that solves your specific pain points. For example, if you struggle with multiple bank accounts, consider a solution that consolidates your data.
What are cash management solutions?
Cash management solutions are custom-designed tools that automate financial data processing, providing clear visibility into your cash flow and actionable strategic insights. This allows you to spend less time on tedious admin tasks and more time focusing on what truly matters – growing your business and reducing financial stress.
Did you know, according to QuickBooks research in the UK, 80% of small businesses are concerned about cash flow.
In this guide, I’ll explain how to choose the best cash management solution for your growing business based on your specific situation to ensure your business can grow.
You might be thinking, why should you listen to me?
I’m Shishir Khadka, a Chartered Certified Accountant turned Cash Flow specialist. I have been featured on leading media sites like Independent, Floatapp, and delivered a masterclass on the topic of cash flow to Zoho a global powerhouse. I am the creator of cashflowhub, the world’s most comprehensive online cash flow resource, based on my expertise and experience working with hundreds of businesses to build cash-rich businesses, reaching £53.8m in annual revenues. I do this all day, every day, for a living, and I serve my clients through my company, Hungry Cash Flow Ltd.
So don’t worry, you are in safe hands. Your time will not be wasted, and by the end of this guide, you will have a clear-cut plan of action to incorporate cash management solutions in your business.
Let’s dive in.
Why Your Growing Business Needs A Cash Management Solution
From my 20+ years working with clients across diverse sectors—from dental practices to marketing agencies—I’ve seen firsthand how business growth can quickly turn cash flow into a complex beast.
It reminds me of my experience of learning to swim: the deeper you go, the harder it is to touch the bottom with your feet.
Just like those early struggles to stay afloat, as your business grows, so does the number of employees, vendors, and financial transactions, making cash inflows and outflows more unpredictable.
The good news is you’re not alone in this struggle. Many growing businesses face similar challenges, and some solutions can help.
From my experience working with hundreds of clients over the years, I can identify five reasons for you to embrace cash management solutions.
1. Controlling Cash Flow Chaos
I always say that you need to have control of your cash flow to have control of your business.
Say goodbye to juggling multiple bank accounts and income streams. A cash management solution summarises your financial data into meaningful information, eliminating manual input and giving you a clear picture of your financial situation.
2. Credit Control Management
I’ve seen countless clients spend their Monday mornings chasing overdue invoices. Cash management software like Agicap, QuickBooks Online, or Xero automates this process, giving you more time to work on your business, not IN your business.
3. Cash Flow Forecasting with Confidence
Just like the tragic events of the Titanic could have been avoided if there had been a decent forecast to anticipate the iceberg in its path, many small business owners could have avoided their businesses going bust if they had a decent cash flow forecast in place, providing early warning signs.
You are here because you don’t want to be in this situation, right?
You understand the importance of accurate cash flow forecasting.
Whether you’re considering hiring new employees, buying inventory in bulk, or expanding to a new location, you need to know your future cash position today to make calculated decisions. A cash management solution uses historical data and current trends to predict your cash flow, identifying potential shortages before they hit.
Fun Fact: When I was training to become a chartered certified accountant, my mentor always said, “When it comes to forecasting, you go one step back and two steps forward.” In other words, analyze past data to make educated judgments about the future.
4. Unlocking Growth Opportunities
One of the first things I do when I work with clients is analyse their monthly net cash flow to identify excess cash that can be mobilised for growth. Cash management software streamlines this process, allowing you to invest confidently and seize opportunities as they arise.
5. Financial Risk Management
One client approached me after receiving a winding-up notice from HMRC for unpaid VAT and PAYE liabilities accumulated over the Covid-19 period. He made decisions based on his bank balance, overlooking outstanding liabilities. A cash management solution could have prevented a cash flow crisis by providing a complete picture of his financial obligations.
Remember, cash flow problems are a leading cause of business failure. A cash management solution acts as your financial safety net, alerting you to potential issues before they escalate into major problems.
Now that we have covered why, we need to cover how to choose the right cash management solution for your business.
6 Factors to Consider When Choosing Cash Management Solutions
In this section, I will describe the factors you must consider when deciding which cash management solution is right for you.
1. Business Size and Complexity
From my experience, if your business generates less than £500k in annual revenue and operates with a single current account and perhaps also a deposit/savings account, you can cover everything by keeping everything in a spreadsheet. This has worked for many of my clients and will work for you, too.
However, if your business has more than £500k annual revenue, you need a solid liquidity management tool as the stake is much higher.
In addition, from what I saw working with my clients over the years, retail, marketing agencies, multi-site dental practices, and construction businesses, as their businesses grow, accounting software on its own cannot handle the demands for information for cash flow decision-making.
I remember meeting a new prospective client with multi-site dental practices a few weeks ago. The guy was literally drowning in paperwork and spreadsheets.
2. Your Budget
From what I have seen from some of the leading cash flow software pricing pages, cash management solutions can range in price from £37 per month to £999 pounds per month, depending on the functionalities you need. You also have to consider implementation costs.
While the initial cost might seem like an investment, a cash management solution can potentially save you money in the long run and significantly improve your financial management
3. The Features You Need
I always advise my clients to match their needs to the features offered. We will cover this in more detail below.
4. Ease of Use
You want to choose a cash management solution that is easy to use and understand. Some tools try to be clever rather than clear. Choose the one that is simple for you and your team regardless whether you are a beginner or an expert performing advanced cash flow forecasting.
5. Scalability
You also want to ensure you adopt the software to scale your business growth.
It reminds me of a luxury sofa retailer using QuickBooks desktop. The desktop can only hold up to 14,500 customer records in a single QB file. As the business was growing, this wasn’t a scalable solution, so I moved the client to QuickBooks Online Advance version. Now, this company is benefitting from integrated accounting solutions to keep the cash flow data accurate and timely.
6. Integration
You want to implement a cash management system that integrates with your current accounting software and ERPs so that you can gather cash flow data efficiently without disrupting the current workflow. More on this topic below.
How To Match Your Needs To Must-Have Features: The Key to Finding the Perfect Cash Management Solution
There are countless cash management solutions, each with features and functionalities. The key is to find the one that fits your business needs. It’s like buying a car: if your goal is to transport your family safely, you don’t need a Ferrari.
Ask yourself, “What’s missing in my current cash management process?” What pain points keep you up at night?
- Are late payments eating into your profits?
- Is forecasting a constant struggle?
- Do you lack a clear view of your cash flow in real-time?
Once you’ve identified these pain points, you can prioritise the features that will genuinely move the needle for your business.
For example, one recurring pain I often see when I consult with clients is the need for consolidating multiple bank accounts and entities and understanding their overall cash position. A good cash management solution can easily consolidate data from all your bank accounts, automatically categorise transactions, and generate a cash flow dashboard, giving you a comprehensive view of your finances in one place.
One of the cash flow software applications I have been using is Agicap ( Software as a service). Agicap does a very good job of consolidating multiple bank accounts and systems into one cash hub and one automated forecast. Here’s the link to see an example of how Agicap works in practice.
Evaluating System Functionalities: From Startup to Scale-up
In my years of working with clients, I’ve found that if your business is in its start-up phase, cloud accounting software like QuickBooks Online or Xero can be sufficient for managing your cash flow. These platforms offer core features like invoicing and reporting essential for early-stage businesses.
However, as your business grows, so do your cash management needs. You might need more robust features like multi-user access and permissions to control who can view or edit financial data.
If you run an e-commerce business, you must integrate with e-commerce platforms like Shopify, Magento, WooCommerce and inventory management tools like Zoho and Vend to optimise cash flow.
Additionally, you’ll likely find yourself needing to:
- Track departmental costs with customised reports.
- Manage transactions in multiple currencies if you’re expanding internationally.
- Integrate with other project management software to streamline workflows as your team expands.
My advice?
Focus on software solutions that match your needs rather than your wants. This targeted approach will save money by avoiding platforms with features you’ll never use.
Take the time to evaluate each solution’s functionalities and ensure they align with your specific cash flow management requirements.
Remember, the goal is to find a tool that empowers you to make informed decisions and drive your business forward, not just a fancy piece of software that looks good on paper.
Seamless Integration: A Must-Have for Growing Businesses
As your business expands, your financial ecosystem becomes increasingly interconnected. Ensuring your cash management solution seamlessly integrates with your existing accounting software and other tools is paramount. This eliminates manual data entry, reduces errors, and gives you a holistic view of your finances in real time.
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Don’t settle for a solution that creates data silos. Instead, prioritise platforms that effortlessly sync with your existing tools like QuickBooks, Xero, or your CRM and payroll systems. This saves you time and empowers you with a single source of truth for informed decision-making.
When exploring your options, delve into online reviews on platforms like G2 Crowd or Capterra to see what other businesses are saying. Compare pricing structures (monthly fees, transaction fees, etc.) and make sure there are no hidden costs.
Remember, there’s no one-size-fits-all solution. Consider your business’s specific needs, whether you’re a small startup or a rapidly scaling enterprise. Explore basic, advanced, and industry-specific options to find the perfect match that will seamlessly integrate with your existing tools and support your growth journey.
Test Drive Before You Buy: The Power of Free Trials
Real-time access to accurate financial data is your superpower in the fast-paced business world. It’s the key to making informed decisions on the fly, whether it’s seizing a new opportunity or addressing a sudden challenge. The right cash management solution will provide this crucial visibility, but how can you be sure before committing?
The answer is simple: Take it for a test drive! Most vendors offer free trials or demos, allowing you to explore the software’s functionality, user-friendliness, and most importantly, its ability to deliver accurate, real-time data.
Don’t go it alone – get your team involved in the trial. After all, they’ll be the ones using the software daily. Their feedback on ease of use and whether the solution meets their needs is invaluable in making the right choice for your business.
Take advantage of free trials to compare different software options and find the one that best suits your business needs.
5 Cash Management Solutions Software you can Choose from
1. Agicap
Agicap is a comprehensive cash flow software established in France and has over 6,000 customers. It now operates in Europe and the UK. Their site has more details.
2. QuickBooks Online
Quickbooks Online (Intuit) is an American company that mainly offers accounting software with cash management features. You can check out my in-depth review of Quickbooks Online Cash Flow Planner.
3. Xero
Xero is a New Zealand based company which is predominantly accounting software, which is very good for financial management. It produces very basic cash flow statements and short-term cash solutions reports. If you are just starting out, then this software will be enough for your cash flow needs.
4. Wave
Wave is a Canadian-based accounting software company operating in the UK. This will work for you if you are short on budget to invest in cash management software and have very basic cash flow analysis needs.
5. Floatapp
Floatapp is a UK-based cash flow software company that helps mainly small businesses. The software is focused mainly on marketing agencies. If you are in this niche, check them out.
Expert Discussion – How Agicap Fills The Gap As Cash Management Solution
In this section, I will share a video of my discussion with Nathaniel Hobson from Agicap on how they are bridging the gap between your cash flow needs and Agicap features. I highly recommend Agicap.
Check out this video.
If you want to learn more about Agicap, you can book time with Nat here.
Are You Overwhelmed by Options? Get Expert Cash Flow Guidance.
If you are overwhelmed by the choices, getting guidance from a cash flow expert is a good move.
From my years of working with clients, I’ve seen many small business owners overwhelmed and drowning in a pile of bills and invoices.
But it doesn’t have to be this way.
As a cash flow CFO, I can add value to your business, just as I helped Dr. Chitnis with his growing dental practice. Watch his case study.
Your Next Step: You Could Be My Next Case Study
This guide has covered a lot of ground, exploring the areas you need to focus on choosing the right cash management solution for your growing business.
Now, it’s time to take action.
Don’t let cash flow hold your business back. Get Expert Cash Flow Help Today and let’s unlock your growth potential together.
Frequently Asked Questions (FAQ)
Let’s address some of the most common questions I get from business owners about cash management solutions:
- How does a cash management solution differ from accounting software?
While both tools deal with finances, they have different focuses. Accounting software (like QuickBooks or Xero) primarily records and reports on historical financial transactions, while a cash management solution focuses on real-time cash flow visibility, forecasting, and optimization. - Is my financial data secure when using a cloud-based solution?
Yes, reputable cash management providers take data security very seriously. They use robust encryption, secure servers, and multi-factor authentication to protect your sensitive financial information. Look for providers that comply with industry standards and regulations (like GDPR or SOC 2) to ensure your data is safe. - Can I use a cash management solution if I have multiple bank accounts?
Absolutely! Most cash management solutions can connect to multiple bank accounts, giving you a consolidated view of your cash position across all your accounts. This makes it easier to track your overall cash flow and avoid surprises. - What if I need help setting up or using the software?
Reputable vendors typically offer comprehensive customer support, including onboarding assistance, training materials, webinars, and dedicated customer service teams. Don’t hesitate to reach out to them for help; they want you to succeed with their product! - What are some common mistakes businesses make with cash management?
Some common cash management mistakes include:
- Relying on manual processes (which are prone to errors).
- Failing to forecast cash flow accurately.
- Ignoring early warning signs of cash flow problems.
- Not taking advantage of early payment discounts from suppliers.
- Overlooking opportunities to invest surplus cash.
By investing in a cash management solution and following best practices, you can avoid these pitfalls and set your business up for financial success.
