Cash is king. As such, finance leaders must know how much cash the business needs, how much it has on hand and how much is owed. Will incoming deposits and cash flows maintain operations, meet vendor obligations and fund growth? Especially in times of uncertainty, where borrowing carries high interest rates and funding can be difficult to obtain, leaders need to know these answers so they can prepare to secure cash from operations or weigh their credit options.
Current, accurate information and regular updates on how much cash the business requires and how much it can expect to receive are critical. Yet leaders often struggle with gaining the real-time data and tools necessary to plan for their organization’s operating cash needs.
Because management and control of cash are vital to business success, you need ready access to data and the ability to analyze cash flows.
Tacking Down and Stitching Together Data
Failure to properly monitor and manage cash flows can cause significant damage to established businesses — and is the No. 1 killer of startups and small businesses.
What holds finance leaders back from better managing cash?
> Being forced to piece together information from multiple departments and sources.
> Manual tracking of scheduled cash inflows from invoices and accounts receivable and cash outflows from accounts payable.
> Reliance on complex spreadsheets to calculate forecasted balances.
> Fixed informational inputs that demand labor-intensive manual updates each time the company needs current information.
Using inaccurate, irrelevant and out-of-date information may ultimately result in miscalculations and cash shortfalls, requiring businesses to turn to short-term borrowing at less-than-favorable rates. Late and inaccurate information can also result in large cash buffers that could have been better used to invest in growth that could supply or sustain future cash flows or to reduce interest expenses and pay down debt.
NetSuite Helps to Effectively Manage Cash Flow
NetSuite’s financial management tools and accounting software(opens in new tab) help deliver the data necessary to manage cash flows. While banking integration provides real-time updates to accounts receivable and accounts payable transactions, cash inflows and outflows are connected to customer and vendor records automatically. NetSuite’s newest tool, Cash 360, further improves effective cash management and decision-making.
The Cash Forecast portlet on the Cash 360 dashboard allows finance leaders to develop accurate forecasts by incorporating multiple data points, like current AR and AP and historical averages of other recurring revenue and expenses from NetSuite, to estimate collections and disbursements. Including one-time cash inflows and outflows, like financing or capital investments, into the forecasting process allows organizations to project their near-term cash needs up to six months ahead and evaluate their company’s liquidity position.
The configurable Cash 360 dashboard also provides a real-time view of your cash position, including key figures needed to monitor the cash forecast. Links allow easy access to records, transactions and reports while aging summary charts enable more informed decision-making. Customizable groupings facilitate efficient cash flow monitoring, allowing business leaders the opportunity to quickly determine the sources of short-term cash flow activity and make faster, better-informed financial decisions.
Leaders who want to minimize risk, create competitive advantage and maximize ROI while funding business operations, meeting obligations and carefully weighing opportunities require accurate, relevant and timely information to assess current position and establish plans.
NetSuite Cash 360 turns a complex, manual process into a simple, automated one by giving finance teams the tools they need to manage cash flows, ensure cash reserves, pay employees and suppliers, fund sales and marketing efforts, service debt and acquire capital equipment, maintain day-to-day operations and make long-term investments.
To learn how NetSuite enables customers to effectively manage cash flow and generate fast and accurate near-term forecasts, join our webinar: Cash Flow Management Made Easy(opens in new tab).