How to choose your cash management software?
👉Cash flow software: the complete guide
Cash Management Software Defined**
First, we will look at what we mean exactly by "cash management software".
Cash management software above all provides a view of available cash - in other words, you can check whether a business has enough money to meet its commitments in the short term and maybe increase its forecast resources to mitigate the risk of facing a cash shortage. Cash management software therefore provides real-time information about available resources so you can anticipate your Working Capital Requirement (over a week, a month, six months, a year) and optimally manage your business. Cash management software is therefore a true decision-making tool!
Accounting software, meanwhile, is particularly used, as its name suggests, for accounting. Accounting software may be adapted or developed by the company itself, or sourced from a supplier. Accounting software generally performs basic accounting tasks, such as accounting for purchases and sales, bank statements and cards, fixed assets acquired or disposed of, year-end entries, and accounting disclosures (balance sheet, income statement, etc.).
Now that you know what cash management software is and how it differs from accounting software, let's take a closer look at why more and more companies are using it on a daily basis.
All you need to know about : Cash Management
Why choose Cash Management Software?**
Choosing your cash management software is an important step in managing your business.
You are no doubt wondering why you should opt for cash management software when you can already do a lot of calculations with an Excel spreadsheet. Excel is a great tool for preparing a business plan and forecasting costs and income before you start up a business. But, once you are up and running, it soon begins to show its limits. This spreadsheet is a source of recurring errors mainly because it is complex, time-consuming and stressful to build. It is often difficult to make it readable and to develop a consolidated vision of your business while keeping the level of detail you need to confidently manage your company.
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Does this manual cash flow management sound familiar? Let us explain what benefits cash management software can deliver. Cash management software is a tool designed to simplify a process that can quickly become time-consuming and laborious by:
- providing more reliable information in real time,
- saving a lot of time by automating data inputs,
- improving visibility of the near future by visualising how different scenarios will impact your cash flow.
Features of Cash Management Software**
To choose the right cash management software for you, focus on what your business needs. Here is a list of features to look for when choosing your cash management software:
Inflow and Outflow Tracking, wherever and whenever necessary
Cash management software should allow you to view your actual cash flows and have real-time information wherever you are. This tool centralizes data so you can easily manage your business thanks to a clear and reliable view.
To manage your cash position, you must be able to monitor your payment terms and your bank overdraft. A carefully configured system of alerts will allow you to take preventive measures in time to avoid getting into difficulty.
Reliable Bank Data
Your cash management software should allow you to extract various data concerning your past and future cash flows to facilitate communications with your bank and negotiations with your partners. If you are planning to apply for a loan, an overdraft or a payment facility, clear and easily readable cash flow reports are a very good basis for engaging talks with your banker.
Jean-Marie Cavalier, a french Pizza Hut franchisee, explains how his cash management software helps on a daily basis: “Whereas I was once rather in the dark, today I manage my business with a much clearer view of my cash flow.” To learn more, watch the video below to discover his experience!
Automated Bank Reconciliation
If you want to reduce inputs by hand, linking your cash management software to you bank accounts will update your cash flows automatically, thereby saving a lot of time compared to the painstaking cash management in Excel.
Short-, Medium- and Long-Term Cash Flow Forecasts
Cash management software should allow you to choose the timescale of the cash flow forecasts you wish to make. Because, depending on your needs, you may want to forecast your business over several years. So make sure that the software allows you to choose the timescale of your forecasts.
To make your choice by taking into account the available features, consult our comparison of the best tools below to find the right cash management software for you.
Our Tips for choosing your Cash Management Software
Choosing the right cash management software can quickly become complicated, as there are a number of criteria to consider. Here are our main tips and things to consider when comparing cash management software to find the one that best meets your needs:
Cash management software is a tool that will assist you daily in running your business. The degree of software customisation is therefore a key criterion to take into account.
Enquire about the possibility of integrating specific items you need, such as categories and sub-categories of inflows and outflows, or a special section for VAT. You may want to export data generated by the software to share it with your partners, banks or investors, so it is essential to be able to tailor your content to the people receiving your reports.
Another important factor to consider is the quality of the data presentation generated by the software and its user-friendliness. One of the main aims of cash management software is to save you time, so its use must be intuitive! Make sure you fully understand how it works and all the features it offers.
Within your company, you may need to work with colleagues on your cash management software. It is indeed a great tool for sharing information so you efficiently run the business. Being able to grant access rights to your employees at different levels can therefore be very useful for your company.
Number of Manageable Entities
If you have several entities in your group, remember to find out about the number of entities you can manage with your cash management software. In this case, you will probably also need a consolidated view of your business and especially of your available cash.
If your company is already active abroad or you are planning to develop internationally, the cash management software will allow you to automate the application of different exchange rates and related fees to clearly see your cash flows with greater accuracy.
You have no doubt realized that your cash management software will be processing sensitive data, particularly for a takeover or if you wish to grow your business. You must therefore also check the security of your data. Make sure that access is secure with an SSL certificate (i.e. with the "https" in the navigation bar and the padlock to the left of the link).
Number of Partner Tools
Before you opt for cash management software, you may already have chosen your accounting software or other tools. So make sure that the cash management software you choose can be automatically connected to these platforms. Integrated software is often what will allow you to scan your invoices and enter banking data. This makes your cash management smoother and centralized in a single tool!
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The kind of Business the Tool is designed for
When you decide to opt for cash management software, on top of the features, advantages and drawbacks, remember to check that it is designed for your type of business (SME, very small business, franchise, large group, sole trader, etc.). This might sound obvious, but it is a decisive criterion!
Support: A Good Customer Service
Even though cash management software should be a user-friendly tool, you might need to interact with the service provider to improve your customer experience and optimise your use of the tool. So don’t overlook this aspect: even if you invest in a cash management software subscription, if you don't know how to fully use all its features, you won't get the most out of it.
Trial Period and Software Demonstration
Finally, find out about the free trial periods and the possibility of testing the tool via a demonstration (guided or personal discovery). This will help you confirm all our tips above. This step will also let you see how user-friendly the tool actually is.
Try Agicap, the cash management software leader :