Did you know that before the popularity of money management apps, cash flow management utilised manual paper-based ledgers?
Financial management was traditionally done with manual entry of cash inflows and outflows. It is no surprise that balancing checking or savings accounts and ensuring the quality of financial records took a lot of time and labour.
Without automation, managing your cash flow will be challenging, especially when there's a high volume of transactions. This is why individuals, and finance professionals, including banks and commercial establishments, rely on cash management services to improve how their money is stored, tracked, and recorded.
Today, cash management software continues to grow in number, with more advanced features being introduced to end users from time to time.
According to Business Research Insights, the size of the cash management market is projected to grow from USD 3 billion in 2021 to USD 7.2 billion by 2031. This only shows how more users are now actively investing in cash flow management and forecasting tools.
In this article, you will learn the meaning of cash management, understand its importance, and differentiate the features of top cash flow management applications. After reading this post, you’ll have an idea of which features you will need, and what cash management solution is for you.
What is Cash Management?
According to Investopedia, cash management is the process of tracking the money coming in and out of your accounts. It gives you control and visibility on your finances and improves planning or efficient fund allocation.
For individuals, managing finances involves balancing cash holding to earn returns on idle funds. Business owners, on the other hand, manage cash inflows and outflows to fulfil payment obligations and strategically plan for future payments.
Furthermore, there are several ways of managing your money, from paper-based ledgers, spreadsheets or advanced software to record your spending.
Regardless of strategies, all cash management solutions share the same goal: to provide you with an overview of your financial transactions so you can make informed decisions on how to manage finances, as noted by a payment operation company, Modern Treasury.
Why Do You Need to Manage Your Cash Flow?
Managing cash is crucial for the financial health of businesses and individuals.
For individuals, good personal finance management ensures financial stability during periods of debt or economic downturn. However, if funds are mismanaged, covering unexpected expenses can become challenging.
For businesses, a positive cash flow heavily relies on timely sales and payments. Improper management of receivables can then impact the business’ growth.
Both of these groups can leverage cash management platforms to manage day-to-day expenses while building long-term financial stability and success.
Top 5 Cash Management Solutions
Below is a list of solutions to organise and optimise your cash flow. Note that software providers listed below are not arranged in any specific order.
1. Agicap
Agicap is a cash flow management and forecasting tool that allows you to monitor and predict your inflows and outflows in real-time.
It also helps you analyse your financial performance with its actual vs forecast feature –showing predicted outcomes of cash based on actual data. With the following data provided, you can plan and optimise your funds.
One of the advantages of Agicap is its utilisation of Artificial Intelligence (AI) – helping users to categorise transactions automatically. This software also facilitates cash flow analysis that provides insightful data.
2. MyAssets
MyAssets is an all-encompassing platform that consolidates your assets. Individuals with a globally diverse portfolio will benefit from this app as it combines financial accounts, real estate properties, curated collections, and other unique assets in one comprehensive platform.
A standout functionality of this platform is that it goes beyond just tracking finances. It also helps aggregate assets into groups and contains a global dashboard showing how assets are distributed. The software also includes a visual map that displays the location of each physical asset worldwide.
Keep in mind that while consolidating all your investments on a single platform gives you greater visibility, it also comes with the challenge of managing and interpreting a large volume of data. In such scenarios, you can seek help managing money or interpreting your data effectively.
3. Nomentia
Nomentia is a multi-bank solution that provides an overview of all your bank accounts in one place. It allows you to access, track, and analyse cash flows, account statements, and payments. Nomentia's banking interface also connects with banks or financial back office systems.
This app helps you integrate your treasury with supplier payments, or handle your bank statements and trade finance.
4. Snoop
Snoop is a money management application that monitors your expenses. It consolidates all your information in one place by linking your bank accounts and credit cards. It also actively searches for opportunities to save money based on your spending patterns.
A major advantage of Snoop is its free service. It also has weekly and monthly spending summaries that greatly helps with managing money.
Since Snoop is a free application, it has limited advanced features –meaning it might not have everything you need for more complex tasks.
5. Trovata
Trovata is a cash management tool that aggregates all your cash data across all your bank accounts. It automates cash reporting and gives you advanced in-app search based on your query and multiple filter options.
Trovata has a dedicated team available to address users’ inquiries and resolve any issues. However, as a beginner who has just started doing cash management, setting up reports is difficult inside the app.
You may need to call their customer support if you encounter difficulties in generating, customising, or interpreting cash flow reports.
Common Features Offered by Cash Management Software
Cash management software provides essential tools for optimising financial operations by automating processes and enhancing visibility. Below are some common features provided by this type of software.
Reconciling Bank Statements
According to the business management platform NetSuite, bank reconciliation is a process for maintaining accurate financial records. It involves comparing accounting records with the corresponding information on their bank statement to ensure consistency.
This feature allows timely correction of discrepancies or errors in financial data. It can help flag any fraudulent activities or unauthorised transactions on your accounts.
Integration with Multiple Systems
Third-party Integration capabilities allow easy connection of one app with other tools, such as accounting software Xero. It can also connect to payment platforms like PayPal, resulting in seamless data flow and reduced manual effort.
Consolidating Funds in Different Currencies
A system capable of managing multiple currencies simplifies the recording and analysis of cash by automatically converting transactions into your preferred currency.
According to a financial institution, J.P. Morgan, this feature minimises the likelihood of manual errors, such as funding mismatches in payables and receivables across different currencies.
Reporting of Account Statements
A global financial technology company, SumUp describes account statement reports as creating detailed summaries of financial transactions and account activities within a specified period.
It compiles deposits, withdrawals, transfers, and other financial activities, providing an overview of the account’s history.
This feature offers transparency regarding financial positions. It also helps you monitor and analyse your finances, allowing you to make better decisions.
Choosing Your Cash Management Solution
Choosing the best cash management solution is crucial for businesses and individuals searching to optimise their financial health. With features such as bank reconciliation, third-party integration, reporting, and liquidity management, this solution helps users in many ways. This facilitates enhanced cash flow, liquidity, and decision-making.
Whether you are monitoring transactions or balancing funds, cash management software is invaluable. It provides insights and recommendations to optimise your financial processes and sustain your financial well-being.
Cash Management: Frequently Asked Questions
1. What is the goal of cash management?
The main objective of effective cash management is to keep a healthy amount of savings while reducing costs to improve your financial performance.
2. What is a cash management solution?
A cash management solution helps you oversee short and long-term obligations while ensuring financial stability. It also reduces unnecessary expenses and optimises excess cash returns.
3. How do you solve cash management problems?
You can solve cash management problems by implementing efficient reporting systems, leveraging technology for automation, and employing proactive budgeting and forecasting strategies.
4. How do you manage personal cash flow?
You can manage cash flow by tracking income, creating a budget aligned with your goals, and prioritising savings for financial stability. Adjusting your spending habits as needed also helps to maintain balance and prepare for unexpected expenses.
5. Why is cash management important?
Cash management is crucial for financial health, as it helps you meet short-term needs, get opportunities, and handle unexpected challenges.
Manage Your Cashflow with MyAssets
In a world where rising costs and unpredictable income can undermine financial stability, cash flow management is vital for individuals and businesses to meet financial obligations and grow opportunities.
Despite its complexity, cash management has become more efficient with tools like MyAssets, simplifying the process and making it easier to handle.
MyAssets is an asset management platform that simplifies the monitoring and management of all your assets in one centralised platform. It allows you to integrate with other banks, streamlining the consolidation of financial data.
With MyAssets, you can catalogue everything you consider valuable, from cash and bank accounts to traditional investments, cryptocurrencies and insurance policies, providing a comprehensive view of your entire portfolio in one place.
Experience the convenience of managing your assets by signing up for a 14-day MyAssets free trial. The platform can be explored in detail at app.myassets.com.
