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How apps can help you manage your cash flow

Small Business Guides | 3 min read

Cashflow is everything

Cash flow is the lifeline of any business and when faced with growing economic uncertainty, maintaining a healthy cash flow can make all the difference. If you’re a small business owner it’s vital to understand your current cash position, and know how to keep cash flowing so the heart of your business keeps beating. 

To support, this article will look at why cash flow knowledge is power, while providing a selection of tools from Xero’s app marketplace to arm you with the right information to maintain and improve cash flow.

1. Understanding current and future cash flow

Having an accurate and up-to-date view of cash flow is crucial to understanding your ability to pay your staff, bills and any debts. The Dashboard in Xero Business Edition makes this simple, providing a snapshot view of cash flow, including total money in and out by month, an overview of bills and expenses, and a summary of your accounts payable and receivable.

But as well as knowing how your cash flow looks today, it's important to understand what it might look like in two weeks or two months. Cash flow forecasting can show you future projections of money in and money out, so you can understand the impact different scenarios may have on your business and your ability to meet commitments, like wages and debts. This can highlight problem areas before they escalate, so you can make informed decisions that are best for your business.

Manual cash flow forecasts, like those created with tools like Microsoft Excel, are commonly used for forecasting. But their manual entry and updating often makes  them  time-consuming and prone to errors. Cash flow forecasting apps solve these challenges, while delivering deeper insights. And because they share information seamlessly with Xero, they are fast and easy to update, keeping you one step ahead. 

You can view the apps that can help you with cash flow forecasting here.

2. Help get that cash flowing

Once you understand your current cash flow and how it might look in the future, you can make a plan to improve it. As well as using your business acumen to increase revenue or minimise expenses - there are tools and services available to provide additional support. 

If you’re not already using online payment services, they are worth considering to help you run a more efficient accounts receivables process and get paid faster. Our research has shown businesses get paid anywhere between 10 and 20 days faster by using these services.

Stripe and GoCardless are payment services that can both reconcile in Xero, in a similar way to bank feeds, making accounting for payments more efficient too. 

We’re all in this together, and it’s important to remember that your customers may be having trouble paying their bills and managing their own cash flow. But there are tools that can assist you managing your accounts receivables. For example, within Xero Business Edition, you can set up payment reminders. Or if you are struggling with bad debts, you could consider assistance from a debt tracking app.

3. Accessing capital

There is also help available for your business to access additional funds if you need it. Xero partners with financial institutions – banks and alternative lenders – to make it easy to apply for business finance. If you decide one of these lenders fits your needs, you can choose to share your business’ financial information in Xero directly with the lender, making the application process faster and easier.  

There are short-term and long-term funding options available and you can learn more about the lenders we partner with in your region here

If you're an accounting or bookkeeping partner, you can also refer to our Cash flow app advisory playbook, for advice on helping your clients with their cash flow, through app advisory.

About Xero app marketplace

The Xero app marketplace features 800+ third party apps that help small businesses and their advisors seamlessly run their business.  With apps that support everything from inventory and logistics to cash flow and project management, businesses have an array of options to build a customised experience.

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