Why You Need Cashflow Management Software | Asset-Map
As a financial advisor, helping clients meet their financial goals is your key priority. To achieve this, accurate cash flow forecasting, planning, and management are vital.
While you can turn to homebrewed Excel spreadsheets or templates for your financial planning needs, they come with their own limitations. They may be effective tools if you’re looking for a simple and minimalist approach to personal finance.
But for small business owners and early-stage companies, all-in-one accounting software can be worth the investment. When people hear this, we often think of platforms like Quickbooks or Xero. But, there’s a step-up software that every financial advisor or business owner needs.
In this article, we’ll go over just what cash flow planning software is and how a company like Asset-Map can help.
What is Cash Flow Planning Software?
Let’s start from the beginning: what exactly is cash flow planning?
Cash flow planning is the process of forecasting and managing the cash inflows and outflows of an individual’s or a business’s financial resources.
As the name says, people create cash flow plans to help manage their cash. This is done by creating a detailed budget that outlines their expected income and expenses within a certain period of time.
To create an accurate cash flow plan, past cash flow data has to be referenced. This period’s cash flow data will then be used to create another cash flow plan for the future. They can then use this info to identify areas where they can implement cost-saving measures when necessary.
The main goal of cash flow planning is to ensure that a business or an individual will have enough cash on hand to meet financial obligations as they come due. This includes paying bills, making payroll, and investing in new opportunities.
By forecasting cash flow according to past financial data, businesses can make informed business decisions about how to allocate their resources effectively to achieve their financial goals.
There are various tools that can be used in cash flow planning, such as cash flow statements and financial planning software.
Cash flow planning or cash flow forecasting software is a tool that helps businesses forecast and manage their future financial resources. If implemented properly, it can help clients immensely as it can be used to create a detailed budget, track expenses, and identify areas where cost-saving measures can be implemented.
A common feature found in modern cash flow planning or cash flow forecasting software is the ability to integrate with other applications and cloud-based synchronization. This feature allows automating inputs between applications—which means less hassle when set up properly—and real-time monitoring—which can improve accuracy with the cash flow planning process.
For financial advisors, having your client’s cash flow data readily available can help immensely when determining which investment options to recommend to your client.
For finance teams and CFOs, it makes monitoring financial data easier thus allowing teams to check the business’ cash position more accurately, and (if need be) perform scenario planning and what-if analysis on the fly.
Benefits of Using Cash Flow Planning Software
One main benefit of utilizing cash flow planning software is the consolidation of multiple cash flow aspects in one hub, making it easier for both clients and advisors to see the big picture. It’s also especially beneficial if your client’s business has adopted the enterprise resource planning (ERP) system as some software solutions support ERP integration.
Moreover, cash flow software can also help you and your clients by:
Generating customized reports that are tailored to the real-time data and goals of each client, which can help financial advisors to better communicate their recommendations and support informed decisions. If your client is a business owner or an entrepreneur, cash flow software can help them visualize past and future cash flows for their stakeholders.
Easily demonstrate to clients how their finances can support their life goals. As they say, seeing is believing. What better way to emphasize how important their financial plan is to your client if not through an intuitive demonstration that they can easily understand?
Providing cash flow forecasts, which can be useful to identify potential funding gaps and help you develop strategies to address them.
Make collaborations between advisors and clients easier through cloud-based integrations, which can facilitate better communication and decision-making.
Manage cash flow analysis and management more efficiently as you take on new clients, particularly if you’re working with large amounts of data.
Overall, cash flow planning software can help you, as a financial advisor, to more effectively and efficiently manage your client's financial planning needs.
What To Look for When Searching for Cash Flow Management Software
When looking for cash flow management software, there are several key features and capabilities that you should look for to ensure that all of your financial planning bases are covered. These may include —
Budgeting and forecasting: Does the software allow users to create a detailed budget and forecast their future financial resources? How detailed?
Expense tracking: Does the software have the ability to track and categorize your expenses? Does it allow you to compare it to your budget?
Customization: How customizable is the software’s budgeting feature and financial projection? Does it fit your specific needs and goals?
Reporting and analytics: Does the software provide insightful reports and analytics, such as detailed reports and the ability to drill down data? Do those analytics help you understand your client’s financial situation as well as help you identify areas for improvement?
Integration with other financial tools: It can be helpful if the software can integrate with other financial tools, such as your client’s bank account or accounting software, or if the business plans to integrate the software with its ERP.
Ease of use: Does it come with a user-friendly interface and clear instructions? Whether it’s for you or your client, the software needs to be easy to use and intuitive.
Security: Since it will handle financial information, it’s important to make sure that the software of your choosing has strong security measures in place to protect financial information.
Pricing: Consider the cost of the software, including any subscription fees or additional costs for features or integrations.
Once the basics are covered, time for a deeper probe into the software. EValue proposed several questions of interest that you can ask your software provider, including:
What are the scope and limitations of the tool?
Does the software use deterministic or stochastic forecasting? If stochastic, what is the basis of the modeling?
Which assumptions are built into the software and which can be amended?
Is the tool updated promptly when legislative changes occur?
How secure is the inputted data, and does the tool meet data protection requirements?
How easily can inputs and outputs be saved to individual client records?
Can clients input information into the models themselves?
Can the software be accessed and used remotely?
By considering these factors, you can choose a cash flow management software that meets your needs and helps you effectively manage your financial resources.
How Asset-Map Can Solve Your Cash Flow Planning Software Problems
While there are many ways to optimize cash flow management, cash flow planning software is fantastic to use with today’s technology advancements. It can help you, as a financial advisor, to monitor your client’s cash position in real-time, help automate cash flow projections, and ultimately help you help your clients better. It’s also a great investment for businesses, especially ones that have adopted a cloud-based ERP system.
As cash flow planning software will be vital to your business and/or general due to its consolidation of management tools, it’s important to pick the right one. Some considerations before picking your software solution include basic features and functionalities (budgeting, analysis, expense tracking, balance sheets), data security (especially if you intend to hook the software up to bank accounts), user interface, and necessary functions (Do you need real-time monitoring? What about data drill-downs and in-depth cash flow analysis?).
That said, if you’re looking for robust, customizable financial planning software that can help you manage your clients and collaborate with them, Asset-Map can help you with that. With visual mapping, continuous tracking, and full data transparency, managing your cash flow is easier than ever.
Want to get more details on how you can use Asset-Map? Schedule a demo here.