Not knowing the importance of cash flow within an organization is easily ignoring its importance in itself. It is a very precise and real measure of the financial health of companies. With adequate monitoring, you can clearly define the ideal roadmap for medium and long-term business purposes.

Cash Flow control is usually a task that, with effort and dedication, is carried out by the finance area and more specifically, the treasurer . Generally, not all areas of the company participate in structuring and despite its relevance and current technical-technological advances, it is common to find its tracking in Excel sheets. It’s time to make changes to this process.

Being at a point in history where technology is added to almost all the processes that surround us: technology in health, in the sale/purchase of goods and services, in education, in logistics, in banking, in supply and finance, it is not possible leave out the Cash Flow and its only technicalization is to sophisticate an Excel sheet (despite being an outstanding tool in its calculation benefits).

How to digitize Cash Flow?

To include an adequate digitization of the process, the following points must be taken into account:

1. Clearly define inputs and outputs

The lines of perception and execution of resources are not infinite. They must be grouped in the way that they add the most value to the organization’s analysis , thus allowing not only to provide a more methodical review framework to the company, but also to more quickly identify deviations that affect the business.

2. Establish reference scenarios

Validating execution is key, but so is being able to have relationship points such as the budget or the forecast to certify whether the path outlined is being followed . It is in this way that adding different scenarios to the digitization tool serves to synthesize in a single framework the validation and, incidentally, the measures to get closer to the goal or to continue emphasizing the points that are leading us to overcome it.

3. Cash Flow is not just the responsibility of the treasurer

The digitalization of the process must be encompassed in a culture of increasingly involving all business units in what happens with Cash Flow. It can be assigned to roles that manage key input and output lines in the organization, the responsibility of completing weekly, biweekly, monthly or under the temporal scheme that is decided, the estimates that will build the flow to compare against budget or forecast . Thus, the discussion about successes or deviations from projections is enriched and the company, as a whole, takes control over its flow of resources.

4. Parameterize alerts and notifications

By defining roles and profiles, you can also define allowed limits for deviations, approvals and specific registration actions on the tool that help to have adequate and real-time monitoring of the records, but above all the cash flow performance.

Having digital control allows you to take proactive and early measures , before arriving at month-end surprises that are detrimental to the company’s resources.

5. Creating tracking charts

The dynamic of many companies of using robust systems to download information and then make reports in Excel must be replaced. The digitalization of the flow must be made the most of to structure the reports that are required and that are automatically generated within the same system.

Once again, the parameterization of roles and profiles becomes vital, since certain types of reports can be assigned to certain profiles and others to the rest of the users.

Important: Technology per se will not provide the solution if the proper assembly of the related points is not contemplated. It is usually a common mistake to think that just by purchasing the most sophisticated tool on the market you are already attacking the problem; it is also crucial to address the culture and discipline of resource control.