Managing Cash Flow - Software solutions for a critical skill

Ask any business owner and he or she will tell you that an influx of cash at any time—be it from an investor or from a debtor making good on a debt—is always welcome in the daily grind of keeping a business afloat. If cash is king when it comes to managing your company’s growth and survival, then managing cash flow—the movement of money into and out of your business—is an essential skill every business owner must possess. Some even say it is an art every business owner must master.

Cash flow and money management are critical to the success or demise of any business, says Merrill Lynch financial advisor Keith Latimer, whose clients include small business owners that need advice on how to track their business. “There are a number of cash-flow management software programs on the market,” Latimer says. “Shop around and find one that best suits the needs of your small business at a nominal price.”

A solid and pervasive cash-flow management system will allow a business owner to keep close tabs on when and where cash enters or exits the business. Any basic operating cash-flow system or software will accurately track a business’s income and expenditures. Many software accounting programs are equipped with reporting features to facilitate cash flow analysis and management. Free accounting templates often can be downloaded from the Internet or from financial institutions. Software programs that can assist cash flow management include:

• Intuit's QuickBooks small-business accounting application
• Peachtree Accounting
• Spreadsheets, which can be used for cash-flow projections and even to consolidate the cash flow results from different divisions that use different accounting applications
• Add-ons to Excel, a component of Microsoft’s Office Suite, such as the suite’s Small Business Account-ing program

Microsoft also has another suite of financial software that is Office compatible. Called Microsoft Dynamic Services, it comprises Enterprise Resource Planning for middle-market businesses, or those with close to 100 employees and annual revenues of over $1 million, and is designed for management of all aspects of a business, and small business financial planning.

Six Disciplines L.L.C., an Ohio company, has developed a unique module that is designed to help the small to mid-size entrepreneur maintain cash flow and other essential elements of business. “I wouldn’t describe us as a traditional software vendor,” says Six Disciplines founder and CEO Gary Harpst. “We are an integrator of proven business practices and sustainable business excellence.”

Harpst founded the company in 2000 after working for many years at Solomon Software, a $60 million provider of accounting information systems for middle-market businesses that was purchased by software giant Microsoft in 2000. “Small and mid-sized businesses have the same execution challenges that all growing businesses have,” Harpst says. “But the challenges include greater economic expertise and people factors to overcome.”

The software tracks company spending, collection and billing, account payables and receivables and ledger modules. At Six Discipline Leader- ship Centers in Florida, Ohio and Indianapolis, “coaches” market the software to prospective buyers and to pitch the entire Six Discipline Leadership series to business owners. “The overall theme of the series is to teach small and mid-sized business how to become more competent in the most critical core skill of all; to learn how to execute their [business] strategy and [cash] consistently over time,” Harpst says. “Our systems are designed to streamline transaction-oriented business processes. The ultimate goal is to transform and improve any internal business process,” he says.

By Glenn Townes and Robert Acquaye