5 cash flow management tools for businesses you need to know

Cash flow is a key factor for any business, referring to the money circulating in and out of an organisation. It's about managing incoming customer payments and handling expenses such as salaries, rent, and utilities. Cash flow health is essential, as it influences whether a company thrives or struggles financially.

Key components of cash flow

1. Cash flow management: This is the ongoing process of monitoring, analysing, and enhancing the finances of a business. The ideal scenario is having more money coming in than going out, ensuring the business is profitable rather than just breaking even.
2. Cash flow forecasting: This involves projecting future finances based on expected sales and expenses. Accurate forecasting helps businesses plan if they can meet future obligations or consider expansion.

By effectively managing cash flow, a business can ensure steady income to cover expenses, reduce stress, and potentially expand. Inadequate management, however, can lead to financial difficulties or even closure.

Importance of technology in cash flow

Advanced tools like Thriday make managing cash flow simpler and more effective. These tools offer analytics and projections to help businesses stay ahead financially. In 2024, there are numerous apps/software available with different features aimed at simplifying cash management.

Features to look for in cash flow management software

When selecting the right cash flow tools, consider these essential features:

1. Automation: The tool should automate tedious tasks, from reporting to syncing financial data, reducing manual work and minimising errors. This includes: 

• Bank reconciliation: Automatically matching bank transactions with your accounting records. 
• Invoice generation and sending: Creating and sending invoices to customers with automated reminders. 
• Expense tracking and categorisation: Capturing and categorising expenses, even from mobile devices. 
• Recurring payments: Scheduling recurring payments to vendors or receiving recurring income from customers

2. Ease of use: It should be easy to set up and start using without requiring extensive training or additional resources. Look for: 

• Intuitive interface: A clean, user-friendly design that makes navigation and data entry simple. 
• Clear dashboards: Visual representations of your cash flow data that are easy to understand. 
• Helpful support resources: Access to tutorials, FAQs, and responsive customer support.  

3. User-friendly interface: Information should be clear and understandable, even for those without financial expertise. This includes: 

• Visualisations: Charts and graphs that make it easy to see trends and patterns in your data. 
• Data export options: Export data to common formats like Excel or CSV for further analysis.

4. Forecasting and reporting 

• Cash flow forecasting: Generate accurate forecasts based on historical data and future projections. 
• Scenario planning: Model different scenarios to see the impact on your cash flow. 
• Customisable reporting: Create reports that provide the specific insights you need.  

Pro Tip:  Don't just focus on the bells and whistles when choosing cash flow software. Prioritise a tool that seamlessly integrates with your existing accounting software. This eliminates double entry and ensures your cash flow data is always accurate and up-to-date.

Recommended cash flow tools for 2024

Thriday

With its user-friendly interface and intuitive design, Thriday provides real-time cash flow insights and customisable dashboards to help you stay on top of your finances. It seamlessly integrates with major accounting software and banks, making it a convenient solution for managing your business' financial health.

Pros:

• All-in-one financial management platform including invoicing, expense tracking, and cash flow forecasting.
• User-friendly interface and intuitive design.
• Provides real-time cash flow insights and customisable dashboards.
• Integrates with major accounting software and banks.

Cons:

• May be relatively new compared to other established tools.
• Feature set may be more focused on smaller businesses.

Float‍

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Float offers a dynamic approach to cash flow management, suitable for businesses of varying sizes. It provides a visual representation of past, present, and future cash flow, along with real-time predictions. A standout feature is scenario planning, allowing businesses to evaluate the financial impact of different actions.

Pros:

• Real-time forecasting for immediate insights.
• Scenario planning to analyse potential financial impacts.
• Integrates with Xero and bank accounts for live data.
• User-friendly interface with visual representation of cash flow.

Cons:

• May have a learning curve for users new to cash flow management.
• Pricing may be a factor for smaller businesses.

‍Fathom

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Fathom excels in combining business planning with straightforward three-way forecasting. It emphasises providing actionable financial insights for better decision-making. Users can create various scenarios and view them on a business roadmap, supporting strategic planning. 

Pros

• Combines business planning and three-way forecasting.
• Provides in-depth financial insights for decision-making.
• Creates scenarios across P&L, Balance Sheet, and Cash Flow.
• Clean interface and polished management reports.
• Integrates with Xero, QuickBooks, and MYOB.

Cons:

• May be more suited for larger businesses with complex needs.
• Advanced features might require some accounting knowledge.

Futrli Predict

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Known for making cash flow forecasting quick and precise, Futrli Predict extracts data from existing accounting software to construct forecasts for up to three years. It offers detailed information on incomes, debts, and customer behaviours, helping businesses understand their cash flow better.

Pros:

• Simplifies cash flow forecasting with live, fast, and accurate predictions.
• Generates three-year forecasts across P&L, Balance Sheet, and Cash Flow.
• Provides detailed information on income, expenses, and customer trends.
• Integrates with Xero and Google Sheets.

Cons: 

• May be overwhelming for businesses with basic forecasting needs.
• Might require some technical setup for optimal use.

Cash Flow Frog

Easy to use and focused on clarity, Cash Flow Frog is a tool that helps in forecasting and planning. It provides insightful cash flow projections and allows comparisons between projected and actual outcomes.

Pros:

• Straightforward and user-friendly tool for forecasting and planning.
• Offers intelligent projections and customer insights.
• Customisable reporting to track planned vs. actual cash flow.
• Integrates with major accounting software like Xero.

Cons:

• May lack some advanced features compared to other tools.
• Might be less suitable for businesses with complex forecasting needs.

Summit

Summit is a flexible tool known for its visually engaging financial planning interface, ideal for those who prefer avoiding complex spreadsheets. Currently free to use in its early access stage, it offers businesses a comprehensive view of financial health. 

Pros:

• Highly visual and flexible cash flow forecasting tool.
• Easy to use, even for non-Excel users.
• Currently in early access and free to use.

Cons:

• May lack some advanced features due to early access stage.
• Long-term pricing and support might be uncertain.

Importance of proactive cash flow management

Effective cash flow management is vital for any business's long-term success, but it's especially crucial in today's unpredictable economic climate. Unexpected expenses, late payments from clients, and economic downturns can quickly throw a business off balance, even if it's fundamentally profitable.

Proactive cash flow management helps you stay ahead of these challenges. By leveraging the right tools and strategies, you can:

• Avoid sleepless nights: No more worrying about making payroll or paying rent, even when unexpected bills arrive.
• Seize opportunities: Have the cash on hand to invest in growth, whether it's a new marketing campaign or expanding your team.
• Weather economic storms: Build a financial buffer to withstand downturns and emerge stronger on the other side.
• Reduce financial stress: Gain confidence in your ability to meet your financial obligations and focus on what you do best – running your business.

Implementing robust cash flow management practices doesn't just steady the ship; it opens pathways to new opportunities and expansion. It's the difference between enduring success and potential failure.

One key to proactive cash flow management is automation. By automating tasks like invoicing, payment reminders, and recurring payments, you can:

• Ensure timely payments: Avoid late fees and penalties by ensuring payments are made on time, every time.
• Improve efficiency: Streamline your financial operations and free up valuable time.
• Reduce errors: Minimise the risk of human error in manual data entry and payment processing.

Thriday: Your partner in proactive cash flow management

Thriday offers a plethora of features designed to help you take control of your cash flow:

Real-time insights: Get a clear, up-to-the-minute view of your cash position with automatic bank feeds.

• Automated invoicing and payments: Create and send invoices with ease, set up automatic payment reminders, and schedule recurring payments.
• Expense tracking and categorisation: Effortlessly track expenses, categorise them for analysis, and identify areas for cost savings.
• Accurate forecasting: Generate reliable cash flow forecasts to anticipate future needs and make informed decisions.
• Scenario planning: Model different scenarios, such as hiring new staff or investing in new equipment, to see their impact on your cash flow.

With Thriday, you can move from reactive to proactive cash flow management, ensuring your business has the financial stability to thrive.

Want an easier way to make sure you're actually making money?

Set up your Profit First accounts on Thriday!  Here's how it helps:

• Always pay yourself first:  Set aside money for your profit right away, so you don't accidentally spend it.
• Keep your money organised:  Put your money in separate accounts for things like profit, taxes, and expenses, so you know exactly how much you have for each.
• Make your business stronger:  Profit First helps you build a stable and profitable business for the long term.

With Thriday and Profit First, you can take charge of your cash flow and make sure your business is successful.

Frequently asked questions

How does cash flow forecasting software compare for small businesses?

Cash flow forecasting software varies in its offerings. Options like Thriday and QuickBooks provide powerful forecasting features

Can you recommend any free cash flow management software in 2024?

For businesses looking for cost-effective solutions, free cash flow management software can be a great starting point. Options like Wave and Thriday offer no-cost versions with basic cash flow tracking and reporting features. These tools enable small businesses to monitor their expenses without a financial commitment, though they might need to upgrade for more advanced functionalities.

What makes the best cash flow management tools stand out in the market??

The top cash flow management tools are distinguished by features such as real-time forecasting, scenario planning, and seamless integration with accounting software. Automation features, like syncing with bank accounts and generating comprehensive reports, also set these tools apart by saving time and reducing errors.

How can a business successfully improve its cash flow management?

To successfully enhance cash flow management, businesses should invest in software that offers real-time insights and detailed forecasting abilities. It's also beneficial to conduct regular reviews of expenses and identify areas where cost-cutting measures can be implemented. Additionally, keeping a close eye on payment cycles and negotiating better terms with suppliers can contribute to improved cash flow.

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