The concept of cash flow refers to the amount of money coming into a business as well as the amount of money necessary to cover expenditures. Money management is not something that can be done by halves, so a primary concern of any successful business owner is ensuring that the cash on hand at any given point meets or exceeds the need. Because revenue earned but not yet collected can't be used to pay debts, for example, efficiently managing cash flow to maintain optimal liquidity is of paramount importance to businesses of all sizes. As a company grows, however, its budget becomes rapidly more complex.
Cash flow is not simply a synonym for earnings before interest, taxes, depreciation and amortization (EBITDA). Proper cash flow management means keeping track of all assets and expenditures. This includes revenue, securities and secondary income streams, as well as all bills, debts, taxes, overhead and operating expenses, and one-time or infrequent purchases, such as new equipment. Several tools have been developed to help business owners manage their cash flow without hiring full-time accountants.
Some platforms are available for free online or as a part of other software packages. For simple needs, the Microsoft Office suite of products includes money management templates compatible with Microsoft Excel. Google Docs provides a free spreadsheet that can be shared through a Google Apps account. These tools are relatively simple to use and give crucial insight into your business's cash flow, but you are likely to need to do some customization to create the layout that serves you best. These types of templates are likely most useful to new business owners or those whose operations will remain relatively small.
The cash flow management tool included with Intuit's QuickBooks software is often considered the most popular tool on the market. Because it comes with software specifically designed for business finance, it is well-suited to a wide variety of business types with little adjustment needed. QuickBooks is designed to keep track of payroll, among other expenditures. Because different companies have different payroll schedules, QuickBooks' cash flow management tool allows for projections for a variety of time periods. Other platforms are often limited to default weekly or monthly settings.
A number of standalone platforms available allow for a more customized approach. These applications are not incorporated directly into your business's accounting software, so updates must be made manually or transferred from a spreadsheet. Both Pulse and Master PlanGuru have high-quality cash flow management tools. Both offer projections for a number of time frames, as well as multiple charts, graphs and metrics for detailed analysis. However, you need a firm grasp of the basics of corporate finance and you should be familiar with your business's unique cash flow patterns before jumping into more complex platforms. Master PlanGuru, especially, is a highly evolved application that isn't simple to use. A company that requires such an advanced tool is also likely to need a dedicated accountant.