Cash Flow Planning and Reporting

“Cash is king.” Not to mention the lifeblood of any small to mid-sized company, especially high-growth and/or highly leveraged ones.

Understanding your cash flow position at any time is critical to running your company smoothly. But cash flow begs to be taken further, into the realm of business strategy. How can you agree to fund a particular project, maybe even expand the business, without an accurate picture of current and projected cash flows? Most CFOs don’t have the information to answer those questions confidently. No wonder making major business decisions is so tough.

On the other hand, with a trustworthy Statement of Cash Flows generated in real-time and linked to your other financial reports, you can conduct meaningful cash flow analysis, and make those strategic decisions confidently.

Cash flow in real life

In the typical budgeting process 90-95% of the effort is on the Income Statement and its supporting detail while the Balance Sheet is built at 50,000 feet. And, at the 11th hour, a Cash Flow Statement is created -- only as precise as the Balance Sheet upon which it is built, and getting no real attention, much less analysis, from stressed out accountants. The Cash Flow Statement, with all its potential to aid business planning, is passed over as a strategic tool yet again.

Why is it so difficult to generate useful Cash Flow Statements?

Two things work against you: technology, and the process supported by that technology.

The perceived lack of affordable, functional software ensures that spreadsheets remain the go-to method for budgeting and forecasting, including cash flow management. The problems with spreadsheets as cash flow tools are:

No dynamic links to the P&L or Balance Sheet; Spreadsheets don’t understand accrual accounting. The reality, Accounts Payable and Accounts Receivable are too dynamic to be modeled in spreadsheets. You’re left using averages or “guestimates” that don’t truly reflect your business and likely will skew your cash flow analysis.
Spreadsheets don’t support “what if…”. To use your cash flow as a tool for exploring alternative business growth and funding strategies, your software has to factor in data changes the second you make them, wherever you make them. Then your time is spent analyzing various business scenarios and their impacts on cash flow.
Version what? You need multiple cash flow versions for comparative analysis and business diagnostics. Creating versions in Excel is complex and time-consuming.

How Budget Maestro can help

What if your budgeting software was not a poorly adapted spreadsheet? What if it was actually designed to make the small or mid-sized company CFO’s cash flow nightmares fade away? What if your business budgeting software was Budget Maestro or Planning Maestro?

Picture this, and imagine your cash flow planning transforming from onerous to easy; rush job to quick and underused tool to strategic opportunity:

Built-in financial intelligence that understands dual-journal entry, creating debits and credits behind-the-scenes for each transaction.
Built-in business logic that understands the attributes of revenue vs. expense, asset vs. liability, and cash vs. other forms of payment.
Built-in Accounts Receivable and Accounts Payable schedules to use as is or tailor, and apply globally or to individual line items.
Ripple through accuracy: A change made to an Income Statement or Balance Sheet line item automatically updates in real time throughout your financials, including the Cash Flow Statement.
Drill-down reports so you can scratch the surface of your high-level Cash Flow Statement, then dig down deep to view individual operational, investment and financing actions.
What if capabilities: Create various scenarios based on different decisions and different cash flows; generate what-if financial statements you can analyze for accurate insight into your options.
Built-in Cash Flow report formats so you don’t have to re-create the wheel
Integration with Workforce Planning elements, giving you immediate information on how real or potential payroll and headcount changes impact cash.
Integration with Capital Asset Planning, so you can forecast capital asset purchase and depreciation/amortization on a detail or aggregate level.