Efficient cash management may spell the difference between a company’s success or failure. It is becoming increasingly critical for finance teams to handle cash as effectively and efficiently as possible to ensure business continuity.
That is when Certinia Cash and Bank Management come in handy! It is a FinancialForce Accounting tool that streamlines your cash and banking activities and gives a real-time snapshot of your cash status.
Let’s understand the notion of Cash Management in Certinia platform & how it can assist in managing your financial data more effectively.
What is the Importance of Efficient Cash Management in Your Business?
Efficient cash management is crucial for businesses, as it directly impacts their financial stability & overall success. Let’s look at some key statistics highlighting its importance:
- Cash flow issues are one of the leading causes of small-scale business failure. According to research by U.S. Bank, 82% of businesses fail due to lack poor cash flow management.
- Effective cash management allows businesses to meet their financial obligations on time, such as paying suppliers, employees, and other expenses. It helps maintain positive relationships with stakeholders and avoids late payment penalties or damaged credit.
- The worldwide cash management system market is anticipated to be worth USD 25.37 billion by 2027, with a compound annual growth rate (CAGR) of 12.6% over the forecast period. It is mostly influenced by the expansion of large enterprises.
- Businesses with efficient cash management can take advantage of strategic opportunities like investing in growth initiatives & acquiring new assets.
- Proper cash management enables businesses to accurately forecast their future financial position, which is essential for making informed decisions & planning for the long term.
- Efficient cash management can also help reduce borrowing costs by minimizing the need for expensive short-term loans or lines of credit to cover temporary cash shortages.
An efficient cash management system is always driven by a powerful accounting tool, such as FinancialForce Accounting. It gives you more control over your cash flows & their accessibility.
This is often configurable as every company is unique and might require a unique set of cash management options as well as services.
That’s where Cash Management in Certinia comes in place. So, let’s explore this concept!
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4 Pain Points of Traditional Accounting
Revenue Leakage
According to Bureau of Labor Statistics (BLS) research, 65% of companies fail within the first ten years, and one of the key causes of this failure is a lack of working capital or cash.
It’s no wonder that businesses that can’t set up and handle debit orders for their clients are continually chasing down payments.
Delayed payments might result in undesirable income leakage, making accurate budgeting impossible. Payment penalties and other transactional fees can potentially harm your bottom line, increasing your cash flow risk.
Complex or Ineffective Integrations
Businesses find it difficult to keep up with rapidly evolving banking technology unless they have access to a specialized IT staff with the necessary banking integrations and technological skills.
Companies frequently discover that their present technology infrastructure is too old or complex to support an effective payment procedure.
The maturity & degree of your banking connection will also play a factor, since weaker partnerships may result in you not receiving the necessary priority or assistance, resulting in slower or more difficult payment procedures.
Similarly, the high expenses of technical innovation may deter businesses from adopting more simplified procedures that they might otherwise seek.
Risk of Fraud
Existing payment and checkout procedures that don’t offer enough protection for online transactions raise the possibility of fraud and client identity theft. It is a reputational risk that no organization can afford and should be avoided at all costs.
Overload of Administrative Tasks
The back-end processing often involves time-consuming administrative tasks, especially when manual repetition is required on a regular basis. Manual input of customer data carries a higher risk of human error, leading to failed payments and cash flow issues.
Free your employees from the burden of tedious data entry and cross-checking by utilizing cost-effective automation tools. From file upload to payment reconciliation, these solutions streamline processing and reduce errors.
In the case of setting up new customers for debit orders, electronic authorization proves far more efficient than traditional voice and paper mandates.
Electronic authorization allows customers to sign up and authorize payments themselves using any web-enabled device, boosting convenience and effectiveness.
Let’s look at how Cash Management in Certinia may assist you overcome these typical accounting issues.
Introduction to Cash Management in Certinia (FinancialForce)
Cash Management plays a significant role in FinancialForce Accounting, offering immediate access to cash balances and transactions across:
- Bank accounts
- Currencies
- Geographical locations
This empowers organizations to efficiently handle their cash flow and make optimal use of their financial assets. This leads us to another functionality of Cash Management – Cash Management Workspace.
It allows users to get access to real-time information and tools to monitor and control cash-related activities. Cash Management Workspace allows you to:
- View Cash Balances: The users can see the current balances in one & multiple bank accounts, giving them a real-time snapshot of available cash.
- Monitor Transactions: The workspace allows users to track cash movements, including incoming and outgoing payments, enabling better cash flow management.
- Forecast Cash Flow: With access to historical data and real-time information, users can generate cash flow forecasts to plan for future financial activities.
- Perform Bank Reconciliation: Bank Reconciliation is the process of comparing Certinia (FinancialForce) transaction values against those shown on a bank statement to uncover any possible discrepancies. Some discrepancies could include:
- A check issued to a vendor, but not yet presented to the bank.
- A deposit paid in at the bank, but not yet shown in the statement.
- A payment taken directly from the bank account, such as a bank charge.
- Manage Cash Positions: Users can make informed decisions regarding cash allocation and investments based on the visibility provided by the workspace.
- Generate Reports: Comprehensive reports and analytics related to cash positions and cash flow can be generated within the workspace, aiding in strategic decision-making.
Cash Matching in Certinia Cash Management
It is a critical process in cash management that facilitates the efficient management of outstanding invoices. It involves accurately matching and applying incoming payments to the corresponding invoices or accounts receivable. By implementing specific matching criteria and leveraging automation tools, cash matching ensures a timely and precise allocation of cash, reducing errors and discrepancies in financial records.
This process plays a vital role in maintaining a healthy cash flow, as it enables businesses to quickly identify outstanding payments and apply incoming funds promptly. Ultimately, cash matching enhances:
- Financial reporting accuracy
- Strengthens customer relationships
- Optimizes overall cash flow management
All this is done through timely payment applications, making it an indispensable aspect of effective cash management strategies.
How Can Certinia Cash Management Benefit Your Business?
FinancialForce Accounting brings you a unique feature – Cash Management, which is considerably more than a standard banking program. It automates your cash input and outflow while also giving you real-time cash position information. Let’s explore its benefits and how it can help your business overcome certain challenges.
Improved Efficiency
This is one of the primary advantages of automated cash management. Automation with the correct tool like Certinia ensures that procedures are quick and error-free.
It also eliminates manual duties such as data collection and aggregation from several sources, user access control, and reporting, particularly in real time.
Streamlining processes with automation often includes audit trails, which may help you prevent possible fraud efforts.
Accurate Data
When relying on Excel sheets and manual data entry from multiple sources, the risk of errors in cash flow reporting is considerable.
It could jeopardize the company’s liquidity, especially when several individuals are collaborating on the same file and data entries come from various subsidiaries.
To ensure greater accuracy and efficiency, it is advisable to automate data retrieval directly from banks and source systems, consolidating all information into a single, reliable source like FinancialForce Accounting.
With instant access to precise financial data, your finance team can swiftly make well-informed strategic decisions, boosting overall performance.
Simplified Audits & Compliance
Streamlining cash management through automation and centralization significantly eases the burden of audits and compliance.
Cash management in Certinia make it effortless to extract the necessary information required by auditors and compliance regulations.
Furthermore, these systems incorporate audit trails, providing a comprehensive history of user actions, aiding in audits, detecting fraud, and identifying irregularities in cash flows.
Empower Accurate Cash Forecasts
Certinia cash management offers unparalleled accuracy by retrieving data directly from source systems and eliminating the risk of manual errors.
Advanced platforms, such as FinancialForce Accounting, leverage predictive analytics based on historical data to deliver precise cash flow forecasts. So, you can utilize the power of data-driven insights to improve your financial predictions.
Optimize Payment Processes and Reconciliation
Embrace the seamless efficiency of fully automated FinancialForce Accounting solutions, offering a comprehensive payment hub to streamline, manage, and centralize local, cross-border, and global payments.
By seamlessly connecting ERPs, financial systems, and banks, these solutions effortlessly process outgoing payments for accounts payable, treasury, payroll, and manual payments.
As a result, you gain enhanced visibility and control over your cash flow destinations. With automated payment reconciliation and accurate posting rules, payment matching becomes a worry-free process, allowing you to process payment batches with confidence and certainty.
How Does AblyPro Enter the Picture?
AblyPro offers FinancialForce Accounting Implementation & Managed Services. Our Certinia (FinancialForce) experts ensure a smooth implementation and ongoing support, saving you time, and effort so you can focus more on your business strategies and goals.
Contact our Certinia (FinancialForce) Consultants to Ensure Your Financial Success!
Author
Project Manager, AblyPro
Manish Maid is a FinancialForce Project Manager at AblyPro with deep technical expertise in handling Enterprise Resource Planning software for optimizing Financial Management, Account Receivables, Account Payables, and other finance functions. With over 25 years of experience in training, implementation, business accounts and operations management, Manish enables organizations to simplify and streamline accounting complexities to optimize business processes while improving operational efficiency and boosting customer satisfaction.
