Always flush with cash thanks to effective and flexible cash flow planning
Interest rate hikes, stock market fluctuations, wars, and pandemics: we live in unpredictable times. For companies this means, that they must ensure their own solvency, reduce risks and take full advantage of possible benefits, such as increased interest returns. But how exactly can companies act quickly in these volatile times? One solution is smart cash flow planning.
Cash flow planning is crucial for companies as it provides a clear overview of the financial situation and helps to avoid liquidity shortages. To make this crucial planning even more precise and efficient, especially in uncertain times, specialized BI planning tools like Board or SAC can be used. These tools allow users to consolidate data from various areas of the company, enabling integrated planning and analysis. The use of such a tool offers numerous advantages, such as improved data quality, increased efficiency, and better decision-making foundations. But what does a cash flow planning look like in planning software like Board in detail?
When planning cash flow in a planning tool, it is important to integrate all relevant financial data, including turnover, costs, investments and financing instruments. To do this, it is often necessary to gain a comprehensive overview and understand the existing contexts. Subsequently, the cash flow modeling takes place, where a precise and realistic model is built to depict future inflows and outflows based on expected business transactions.
What if? Include different scenarios through simulation function
It is also advisable to consider various assumptions and scenarios to analyze the impact of changes in business areas on the cash flow. This can be realized in a planning tool like Board through a simulation function. For example, in your cash flow planning within the simulation function, you can see how liquidity changes with lower or higher revenues. Cash flow planning should be regularly monitored and adjusted to ensure it aligns with the current business results and financial goals of the company. This is also no problem in BI planning tools, as the values can be easily adjusted at any time.
But it is not only the integration of current and historical data that is of high importance for good cash flow planning. Empirical values should also be taken into account – but not only your own. Effective involvement of relevant stakeholders, such as financial experts, sales managers, and company leadership, allows for a holistic view of the cash flow and enhances the quality of planning outcomes. A thorough analysis of past cash flow patterns and involving other stakeholders can help identify future trends and potential risks, allowing them to be appropriately considered in the planning process. Regular cash flow analysis enable continuous review of planning results and provide the opportunity to identify deviations and make adjustments as needed.
Can’t it all be done in Excel? The benefits of a BI planning tool.
Planning tools such as SAC or Board automate and optimize the cash flow planning process and integrate data from different sources such as financial systems, sales and cost centers. This increases efficiency and reduces manual errors. The software enables real-time monitoring of the cash flow and offers the possibility to forecast different scenarios. This allows companies to react quickly to changes and make informed decisions. Through the data visualization and reporting features of a BI planning tool, companies can present the cash flow in a clear manner and provide essential information for management and external stakeholders.
In summary, cash flow planning in a BI planning tool is of great importance for companies to manage liquidity and make informed decisions. The integration of a BI planning tool enables efficient cash flow planning through automation, real-time monitoring, and data visualization. In times of unpredictable change, the simulation function is particularly important. This allows a wide variety of scenarios to be reproduced quickly and precisely. This also significantly reduces risks in planning. The speed at which you conduct your cash flow planning also increases significantly through the use of a BI planning tool. This allows you to not only complete the planning faster, saving time and costs, but also to adjust the planning much more quickly in the event of significant changes. In these volatile times, it enables better control of your company.
Do you want to know how smart cash flow planning can help you not only avoid risks but also save money? Then don’t miss our lecture “Board is like Free Cookies – Save money instead of spending it through optimized corporate and cash management!” at this year’s Board Beyond conference on 13 June 2023. Sign up for free now https://on.board.com/3VHlAux
