To ignore the importance of cash flow within an organization is easily to ignore the importance of cash flow itself. It is a very accurate and real gauge of the financial health of companies. With proper monitoring, it can clearly define the ideal roadmap for medium and long term business purposes.
The control of the Cash Flow is usually a task that, with effort and dedication, is carried out by the finance area and, more specifically, by the treasurer..
Generally, not all areas of the company participate in the structuring and despite its relevance and the current technical-technological advances, it is common to find its follow-up in Excel spreadsheets. It is time to make changes to this process.
Being at a point in history where technology is being added to almost every process around us: technology in healthcare, in sales/purchase of goods and services, in education, in logistics, in banking, in procurement and finance, it is not possible to leave out Cash Flow and that its only technification is to sophisticate an Excel spreadsheet (despite being an outstanding tool in its calculation benefits).
How to digitize the Cash Flow?
In order to include an adequate digitization of the process, the following points should be taken into account:
1. Clearly define inputs and outputs
The lines of perception and execution of resources are not infinite. They should be grouped as follows that add the most value to the organization's analyticsThis not only provides the company with a more methodical review framework, but also allows it to more quickly identify deviations that affect the business.
2. Establish reference scenarios
Validating the execution is key, but so is being able to have relationship points such as the budget or the forecast to certify whether or not you are following the path you have traced out. Thus, adding different scenarios to the digitization tool serves to synthesize in a single framework the validation and, incidentally, the measures to approach the goal or to continue emphasizing the points that are leading us to surpass it.
3. Cash Flow is not only the treasurer's responsibility
The digitization of the process must be embedded in a culture of doing more and more. all business units are involved about what happens with the Cash Flow. Roles that manage key input and output lines in the organization can be assigned the responsibility of filling out weekly, biweekly, monthly or under the time schedule that is decided, the estimates that will build the flow to be compared against budget or budgeting. forecast. Thus, the discussion on successes or deviations from projections is enriched and the company, as a whole, takes control over its flow of resources.
4. Configure alerts and notifications
By defining roles and profiles, you can also define allowable limits for deviations, approvals and specific logging actions on the tool that help to have a proper and real-time monitoring of the logs, but especially the cash flow performance.
Have a digital control allows proactive and anticipatory measures to be takenbefore there are surprises at the end of the month that are detrimental to the company's resources.
5. Creation of tracking charts
The dynamic of many companies of using robust systems to download information and then make reports in Excel must be replaced. We must take full advantage of the digitalization of the flow to structure the required reports within the same system and automatically generate them.
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 often a common mistake to think that just by buying the most sophisticated tool on the market, the problem is being attacked; it is also important to address the culture and discipline of resource control.
