Cash management as a major challenge for SMEs and SMIs in 2022

If there is one lesson to be learned from the last two years of crisis, it is the importance of cash management and monitoring. This is an issue that affects all sectors, all types of companies, and in particular SMEs and SMIs.

A tense context

Mid & Large Caps have been particularly weakened by the economic slowdown and its implications (longer payment terms, etc.). Even if they do not have the same resources as large companies, they face similar problems (multi-banking, multi-entity, WCR management, etc.) that require cash management, as an example.

By benefeting from aid schemes (such as the State Guaranteed Loan - PGE) during the crisis, companies have taken on debt. This situation will generate significant cash needs in the months and years to come to repay these loans. Mid & Large Caps will therefore have to invest more in optimising and digitalising their cash management.

The keys to cash management

The PwC study also confirmed that cash management is the major challenge for finance departments in 2022.

See also our summary infographic of the study here: our infographic

To set up the management and monitoring of their cash flow, Mid & Large Caps will have to set up the following processes:

• Put a treasury manager in charge of cash-related issues;
• Establish a Cash culture (discover how to do it step by step) within the company;
• Do a regular and detailed follow-up of the cash position to have real-time treasury vision;
• Carry out cashflow forecasts to identify potential dysfunctions and rectify them;
• Manage the variations of the WCR and monitor incoming customer payments to control delays and reminders.

There are cashflow forecasting software that complete the expertise of financial departments and assist them in Cash management.

The Cashlab tool

Cashlab offers a 360 degree view to assist executives, financial managers and treasurers in their decision making.

Our tool helps to manage cash and offers optimization actions through:

1/ Banking Dashboard & Forecast

• Connection to banks by API in a few clicks
• Real-time & multi-bank/multi-entities Cash Reporting with automatic cashflow categorization;
• Analysis of cashflows and cash-burns;
• Automatic comparison of Actual vs. Forecast to adjust and make the right decisions
• Monthly and 12-months cashflow forecasts; 

2/ An accounting module:

• Complete historical diagnosis of its activity, WCR & cashflow;
• Transformation of the operating budget into a cash forecasting (12 to 36 months), including simulation and consolidation features;
• Analyse the differences between your Forecasts and the actual;
• Simulation of operational scenarios;
• Available reporting for management and financial investors.

For more information on our tool, do not hesitate to request a demo from our team by clicking here.

Written by Eléonore Berne, on 02/23/2022.