Cash is the lifeblood of any business and it is the key parameter on which a business’s health is evaluated. In addition to enabling maintenance of regular operations, a smooth and stable cash flow is key for a business to invest in growth opportunities and stay competitive in business while maintaining financial flexibility.

As we have discussed in our previous blog here, Accounts Receivable do play a critical role in positive cash flow management; but it is still one of many contributing factors. So, as soon as a business gets its Accounts Receivable right on point, many potential areas can be improved to better its current cash flow management.

So what are those cash management trends that can be considered to better your current cash flow? With inputs from our experts at our remote accounting firm, Back Office Accountants, we provide answers in this blog today. Read on:

Top 4 Cash Management Trends to Watch Out for in 2022:

Cloud Finance Management Solutions for Improved Performance: In most cases, a business effort to measure the impact of current cash flow and implement new strategies are cut short by a lack of adequate reporting and tracking of cash flow activities. However small and medium businesses today are leveraging cloud-based finance management solutions.

Syncing sales insights and tracking, these applications provide at-a-glance dashboards that can give a real-time picture of gross profit margin, net cash flow, inventory turnover rate and other detailed information as per your specification. They are also adept at automating complex cash management processes and providing audit trails.

Cloud-based applications today increase a business’s visibility on cash position, give greater control and better equip an organizational stakeholder’s right info for optimizations. If you are a small and medium business sits high time to invest in a robust cloud-based accounting software application to further improve your cash management in 2022.

Digitalization and automation for improved efficiency:  Errors and bottlenecks often thwart the accuracy of cash reporting. Though automated accounts payable, and accounts receivable have become a norm today, there are businesses that still rely on manual paper-based processes.

Relying on these conventional systems not only costs the time it also lags the cash tracking and reporting while negatively impacting their accuracy. So business will be well served by automating manual processes that can save time and improve accuracy.

Automating payments, digital inventory management systems and electronic invoicing are three commonly leveraged digital systems commonly leveraged by businesses to improve their cash management today. Even one of our clients at Back Office Accountants Clients has replaced the paper-based system with smartphones and tablets which led to reduced paperwork, and increased efficiency and accuracy resulting in better cash management.

Enhanced Accounts Receivable with automation, machine learning and AI: It is hard to overlook the critical role of Accounts Receivable in improving cash management which is why we dedicated an entire blog to the topic here. A more efficient client pre-selection, constant monitoring and follow-ups for unpaid dues and simplifying the payments processing are already being adopted by smart businesses to improve their Accounts Receivable for better cash flow.

But given the massive impact of AR on the improvement of cash management, there is always room for improvement which businesses today aim to focus on. According to research, businesses are actively adopting AI and ML to understand customer behaviour to reduce the risk of non-payment. AI and ML are also actively being used to predict the payment pattern of the customers for accurate cash flow forecasting.

Outsourced cash management service: Businesses have finally identified the importance of outsourcing a business process for improved focus on their core strategic goals like cash management. For example, outsourcing tedious and hectic Accounts Payable and Accounts Receivable gives more time at hand for identifying key optimizations that can further improve the cash flow. Even better, global businesses are also actively considering cash management as a service (CMS) to further improve their cash position in less time and least effort.

As a trusted remote accounting firm, Back Office Accountants specializes in Outsourced Accounts Payable, Accounts Receivable and Bank Reconciliation Services which directly play a role in improving cash flow management for enhanced financial health. Our accounting experts are certified CPAs who work hand-in-glove with businesses in identifying the root of the cash flow problem, suggest a plan of action and even execute it to perfection. If you are a business looking to fix your cash flow problems by outsourcing Accounts Receivable, Accounts Payable or Bank Reconciliation Services, you can contact us here: