A lot is said about new technology, the change it brings and the pace of that change in the modern day, but one thing will always remain the same – cash is the life-blood of any business.
For many businesses, managing cashflow means approaching and working with a financier, whether that’s a bank, a private investor or any other source which can cost you time and effort to get on board or agree proposals; time spent away from your actual business. So how can cloud accounting help you improve this age-old problem?

UNDERSTAND YOUR CURRENT POSITION

Being on a cloud accounting platform grants you a much easier way to understand your existing cash flow situation as reporting can be done on a real-time basis, and crucially shared as well between the parties involved – be it the bank, your investors or your advisors. It is therefore important to put the time into setting up what reports you might want to get from your system as early as possible. Do you have a lot of accounting adjustments to be made each quarter on your Profit and Loss, or can you rely on the system to run a cash-transaction based Profit and Loss and use this as a basis for understanding your cash flow?

You might want to set a few KPI’s if you’re looking to improve your cash flow situation too. For example, if you can bring your debtor-days down and stretch your creditor-days in agreement with your suppliers this will ease your cashflow in a tight period. Cloud accounting systems can help you monitor this, and even perform basic invoice-chasing to drive the debtor days down, link to online payment systems to help you collect cash, and allow you to plan supplier payments too.

RUNNING FORECASTS

Just as cloud accounting packages will lead you to generating realtime management information, it will also give you the ability to cast expectations ahead and create financial forecasts with ease and again be able to present these and share among all parties’ simply. The different packages of course all have different in-built tools, for example, Xero’s Budget Manager allows you to create forward looking budgets for different departments or scenarios, but there are also additional apps that can link to many of the cloud accounting platforms. Cloud software such as Futrli, Fluidly or Float can all connect to your accounting system and give you forward looking projections and further cashflow analysis. Even if you want to keep things simple and piece together a forecast yourself in a spreadsheet, this is done effortlessly if your records are easily available in your cloud accounting system and exportable into your spreadsheet directly.

OTHER OPTIONS IN THE LENDING MARKETPLACE

The cloud accounting ecosystem that has grown up over the last few years has more to offer than ever before for anyone looking for funding. What was previously unavailable to smaller business is brought within reach – a prime example being invoice factoring. This may have historically been the preserve of those with particularly large debtor books to be of any interest to a bank, but now, with services such as Satago connected to your accounting system you can factor debts invoice-by-invoice to suit you. Another example is Iwoca, a lender who can assess you by connecting to your cloud accounting system making the borrowing process more accessible and flexible. Others exist too, and of course, this is all in addition to the traditional forms of finance as well! And we haven’t even mentioned crowdsourcing options either!

TAP INTO THE EXPERTISE YOUR ADVISORS CAN GIVE YOU

Whatever stage you’re at – we can be there to help you, outlining your first business plan, establishing what funding you might require and forecasting this out, helping you approach lenders and assisting with your applications, and all the onwards monitoring that will keep you on top of your business and flourishing – we have the expertise that can help.

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