Why Traditional Cash Flow Tools Fall Short and How Tech Is Bridging the Gap

Bridge Gap

Traditional cash flow tools have long been the foundation of financial management. However, the impact of the COVID-19 pandemic exposed the numerous limitations of traditional approaches to cash flow management. According to a survey conducted by the International Labour Organization, 85% of surveyed businesses reported the pandemic had a medium to high impact on their operations. Only a third of these businesses had sufficient funding for recovery.

Cash flow is the lifeblood of any business — it plays a pivotal role in an organization’s growth, stability, and decision-making process. Without a clear understanding of incoming and outgoing funds, a company’s survival and success are at risk. Traditional cash flow tools simply can’t provide the insights and functionality needed for today’s ever-evolving business landscape.

Fortunately, technology is stepping in to bridge these gaps, revolutionizing the way businesses manage their cash flow. In this article, we’ll examine the current limitations of traditional cash flow models and contrast it with the capabilities of modern, tech-powered cash flow tools.

How Traditional Cash Flow Tools Are Hindering Businesses

Arguably, one of the biggest challenges of utilizing traditional cash flow tools is the lack of insight they provide into a company’s financial position. Most tools only provide a snapshot of an organization’s performance at a specific time, which means companies don’t have a complete picture of their cash flow.

This only scratches the surface of how legacy cash flow tools are hindering business performance. Limited integrations, manual processes, inaccuracies, and no predictive capabilities in traditional cash flow management tools all contribute to the problem.

Lack of Integration

Traditional cash flow tools often exist in isolation, disconnected from other essential business systems such as accounting, inventory management, and sales. This lack of integration can lead to data silos and, as mentioned above, make it challenging to get a holistic view of a company’s financial health.

Manual Processes

According to one survey, roughly 41% of businesses rely on manual expense management requiring manual data entry and reconciliation. This is a time-consuming and error-prone process. Employees spend valuable hours inputting numbers and cross-referencing data, leaving room for human errors that can have serious consequences for decision-making.

Inaccuracy and Delays

Due to their manual nature and limited ability to update data in real-time, traditional cash flow tools often result in outdated or inaccurate cash flow forecasts. Businesses relying on these tools might find themselves making critical decisions based on obsolete information.

Limited Predictive Capabilities

Most traditional cash flow tools lack advanced technologies like artificial intelligence (AI) and machine learning. Without these capabilities, the tools’ ability to predict future trends or financial issues is limited, leaving businesses ill-prepared for unexpected challenges.

Embracing New Technologies Enhances Cash Flow Management

While human intuition can help organizations to take a step in the right direction, it’s technology that accelerates business performance. In fact, McKinsey reports that data-driven businesses are 19 times more likely to be profitable than organizations who rely on traditional or human-based processes.

In cash flow management, modern technologies have the ability to revolutionize processes. Let’s explore five examples of technologies stepping up to change the status quo.

AI and Predictive Analytics

The technological revolution in cash flow management brought AI and predictive analytics into the equation. These technologies automatically analyze historical data, identify patterns, and generate accurate forecasts. By leveraging AI, businesses can anticipate cash flow fluctuations and make decisions that are backed by data proactively.

Seamless Integration

Modern cash flow management platforms offer seamless integration with various business systems. They can connect with accounting software, CRM systems, and other data sources to provide real-time insights. This interconnectedness allows for a holistic view of financial data, enabling more informed decision-making.

Automated Processes

Arguably, one of the most significant advantages of technology in cash flow management is automation. Advanced tools automate manual and time-consuming tasks like data entry, reconciliation, and even payment processing. This not only saves time, but also reduces the risk of human error, ensuring greater accuracy in cash flow management.

User-Friendly Dashboards

Cash flow management systems with modern features and capabilities provide user-friendly dashboards that make complex financial data accessible and understandable. These intuitive interfaces present key metrics and insights in a visually appealing manner, allowing decision-makers to grasp the financial health of their organization at a glance.

Risk Identification and Mitigation

In traditional cash flow management processes, organizations typically rely on human intervention to identify potential risks and problems. This is incredibly time-consuming. Modern cash flow management systems can automatically flag and alert risk managers to potential problems, enabling them to act more quickly.

Tesorio: Bridging the Gap

Cash flow management is a critical component of business success, and the limitations of traditional cash flow tools have become increasingly evident in today's fast-faced, data-driven world. For organizations to thrive in today’s business environment, they must embrace modern cash flow management technologies.

Tesorio is empowering organizations to move beyond the tedious tasks traditionally required to manage cash flow and embrace modern technologies. Our platform provides smart cash workflow tools, including AR forecasting and accounts receivable, in a single platform. Our goal is to unlock $1 trillion from our customers' balance sheets by 2030, enabling organizations to not only transform their cash flow management process, but their entire business.

A number of our customers have already seen tremendous success by transitioning from traditional cash flow management tools to our platform. For example:

  • GitHub reduced time on billing tasks by 30%

  • Smartsheet exceeded a quarterly cash goal by nearly $14 million

  • Seismic gained real-time data integration with NetSuite and increased data visibility and push

  • Discovery Education reduced average collection period from 96.8 to 59 days in a single year

  • Apptio cured a backlog of 24-36 months

From improved accuracy and time savings to better decision-making and performance, Tesorio enables organizations to leave behind archaic processes and embrace the modern capabilities needed for today’s business market. Our platform provides integrated, automated, and predictive tools that empower businesses to make more informed decisions and navigate financial challenges with confidence.

Contact us today for a free demonstration. Not ready to talk? Check out our product page to delve deeper into our platform or read recent articles to learn more about the importance of modernizing cash flow management processes.