How to optimise your SMB treasury?

Anticipating the cash flow needs of your SMB

Cash flow enables the identification of working capital and the study of working capital requirements (WCR). Indeed, optimising the cash flow of an SMB requires the implementation of effective tools to anticipate its cash flow.

It is necessary to have a global vision on how the company consumes its cash and allocates its resources. Planning tools allow better management of cash flow forecasts in order to effectively manage a company. Cash management software such as Kyriba software allow SMBs to avoid potential difficulties in the development of the company. These tools ensure the liquidity of your company and optimise your financial results.

Making a liquidity plan is a way of anticipating future disbursements and increases in the company's cash flow requirements. A cash management software dedicated to SMBs allows business owners to automate their cash flow forecasts and visualise future cash flows by synchronizing bank accounts.

Define a cash flow budget forecast

A cash flow forecast is one of the key elements of the forecast budget, along with the provisional income statement, the financials forecasting, and the financing plan.

By defining a cash flow forecast, you will be able to anticipate future cash flow needs with the estimated cash flow of the company.

It is recommended that the cash flow forecast be reviewed with a table showing all the estimated cash flows of the business with cash receipts (inflows) and cash outflows.

Firstly, the manager must validate the budgets (purchases, sales, human resources…) and weight them if it needs. Then, he has to deal with two adjustments: pass the flow from accounting date to flow date and calculate the monthly VAT disbursement. He has to apply the average payment terms observed earlier to sales and define rules for the various exchanges.

He also has to forecast the evolution of the following year’s cash flow, month by month. It is prepared at the end of the accounting year from the other budgets already produced. It is necessary to indicate all flow types that the company has had to process. Forecasts are drawn up on the basis of transactions already carried out and on the basis of the manager’s knowledge of his company, his customer base, and his sector in order to indicate the monthly cash balances to come.

Entering supplier and customer payment deadlines and all company expenses in this table enables you to anticipate future cash flow needs.

By using a management tool, you can optimise your cash flow, postpone certain deadlines, or reduce expenses to avoid late payments. Managers can also plan cash flows and decisions related to purchases or bank loans.

Implementing cash management tools for an SMB on a daily basis

Implementing tools helps to optimise the cash flow of an SMB. This makes it possible to deal with the same problems encountered by large groups (management of several banks, several bank accounts, risks of fraud, working capital requirements, etc.).

Taking inventory of cash receipts

Before carrying out an inventory of cash receipts, it is better to define all incoming cash flows: customer invoices, VAT, money from a bank loan, subsidies or grants paid out, etc. With the help of cash management software, you can have a better overview of your cash flow forecasts as well as your company's cash outflows. This will save you time and improve your productivity.

Tracking cash flow performance indicators

In order to ensure the development of cash flow performance, a company must define performance indicators and monitor their evolution in a cash flow table (turnover, break-even point, WCR etc.). These indicators depend on the cash flow objectives set by the company.

Kyriba's cash management tools provide visibility into your company's cash flow. Benefit from daily monitoring of your cash flow performance indicators. Automated forecasting, visualization of cash inflows and outflows are communicated to you in a cash management solution as intuitive graphs. Adopting a cash management software allows you to overcome the challenges of cash management.