Cash Remains King As Businesses Gear Up For Growth

Brexit, the pandemic, the cost of living crisis and the war in Ukraine have caused some significant disruptions to the economy over the past few years that this has meant a big shakeup for the business sector ...

But one principle remains constant throughout all of these challenges, and that is the fact that cash is king. Cash management has meant businesses need to optimise cashflow and refine their forecasting methods.

"Businesses have had to maintain a firm grip on their cash situation!"

This heightened focus on cash management is reflected in a report by software provider BlackLine, which found that 62% of respondents believed real-time cash flow understanding would become more critical over the year. However, 98% wished for greater confidence in their visibility over cash flow.

Economic uncertainty, late payments, soaring inflation, and energy costs all contribute to cashflow problems for small businesses. But many firms have adopted new technology and digital tools to help manage cash flow, particularly in light of their challenging experiences during the pandemic.

The focus on forecasting has intensified, with American Express research revealing that it is the task that consumes most of the time and resources of finance teams. They also found that finance functions have increased the frequency of their rebudgeting or reforecasting, with 33% expecting to do it monthly in the coming year, up from 28% before the pandemic.

"In the context of growth, cash flow remains as crucial as ever!"

Robust cash planning, not just for the immediate future, but for the next year and beyond, is now a priority for most companies. The prospect of achieving real-time, 100% visibility of cash makes it unlikely that businesses will revert to laxer cash management, regardless of economic conditions.

Cash is king, and it always will be.


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