Cash is like life-blood. Can you do without it? NO. Can you do with less of it? NO. Can you do with more of it. NO. So what’s it you need out of cashflows. That it remains stable and predictable, both in the income and outgo.
Every business is conducted with the intent of earning profits for those who put in the capital. This comes about after all the activities to run a business are done satisfactorily and are paid for. While this is the story on the expense side, the income side of cash flows is equally important and significant. In fact, without income, the question of expenditure just doesn’t arise.
Cash and arising out of it, cash flow are very, very important in business, especially for those which are very small and startup businesses. It is precisely for this reason that cashflow manager software otherwise called financial management software is of such significance in every business.
Today we tell you how and why the cashflow manager software are important to any business.
- Making predictions for business
With a cashflow manager software, it’s easier for businesses to make all manner of prediction, be it to do with cash or any other aspect of business. When a correct prediction can be made of likely situations, strategies can be formulated for many activities including procurements, giving customers discounts, doing campaigns, recruiting people etc. Practically every aspect of doing business being affected by cash flows, making prediction using cashflow manager software is one way of keeping things certain, and never forgetting things.
2. Keeping track of receivables
With the right kind of financial management software, tracking receivables is well-nigh impossible given that using older systems with very visible gaps may lead to an untenable situation where management has no clear idea of how much money is lying around, and how much is expected to come in. In such a situation, doing business becomes very, very unpredictable, and is fraught with danger.
3. Creating favourable contracts based upon cash flow patterns
Using the right cashflow manager software is one way by which customers can be segregated into paying and non-paying ones. Basis this segregation, customers can be given differential treatment which can go on to get bigger and better business from those who matter. This is an excellent system to know whom to side line and for what reason.
4. Involving newer products
Wheat for instance could have a different market than for its bye-products including flour, bread and could likewise command different cashflows. While wheat could be slow-moving, its bye-products could move fast across the shelves. This may call for a variation in the product mix leading to higher incomes that also arrive faster into the cash-flow pool. A business using a financial management software can be expected to use it advantageously to get on board products with good turn-around time or those who don’t block big funds.
5. Working with lesser cash
A financial management software is the best way to know and predict in advance the requirement of any business entity. That being so, businesses using such a system needn’t carry excess cash just to ward off unanticipated situations and can in fact, work with the bare minimum. This could make businesses far more profitable while using resources judiciously.
6) Investing wisely
Short-term investments even in things like mutual funds and money-market instruments aren’t exactly unknown in the world of enterprise. The only reason they aren’t used widely is because no one is clear with what they need in terms of cash and what can be kept aside. This essential information is correctly informed by cashflow manager software due to which excess resources can be profitably deployed in other businesses and in sectors entirely different from an existing businesses’ line of business. The latter in fact, can sometimes help earn handsomely!
Cashflow manager software is thus the need of the hour today, and not simply a fad. Use it. It helps!