ONE of the biggest changes in the small business sector over recent years has been the increased use of computer accounting packages such as MYOB and QuickBooks.
While many business people still battle with the finer points of working with technology, there are a number of software products that can also assist with cash flow management.
Notable examples include the cash flow forecasting software Winforecast and a newly revamped package from MYOB called M-Powered invoices.
The latter product is designed to automate, and therefore speed up, the flow of money between a business and its various customers and suppliers.
It supports the move towards electronic banking, which helps to cut paperwork as well as speeding up the flow of money across the business sector.
Winforecast was designed to improve cash flow forecasting and provides an alternative to the use of Excel spreadsheets.
Paul Mews, a partner of business consulting firm Engelhard Consulting, believes many small businesses don’t prepare cash flow forecasts.
“Most businesses don’t forecast but they should,” Mr Mews said.
“It’s a good management tool. You have the ability to anticipate problems before they become a real issue for the business.”
He said cash flow forecasting should also help small businesses develop a better relationship with their bank.
For instance, it could save business people from having to go back to their bank to ask for an increased overdraft to deal with an unforeseen cash flow squeeze.
Mr Mews estimates that most businesses preparing cash flow forecasts would use Excel spreadsheets.
He believes Winforecast is a more powerful and efficient forecasting package, automatically calculating key performance ratios that help business reporting. It helps a business monitor variance between actual and forecast performance and can assess the impact of ‘what if’ scenarios on the performance of a business.
In addition, Mr Mews said it eliminated the undetected errors common in spreadsheets and single-entry packages.
Derrice Dillon, an executive director of Alliance Finance, is a committed user of Winforecast.
Ms Dillon started using the product about 18 months ago when Alliance was preparing for its stockmarket float, and she was awash with spreadsheets.
“Its definitely a time saver and very simple to use,” she told WA Business News.
“So long as you have used spreadsheets, you can just jump on and you’re able to use it very quickly and simply.”
Ms Dillon said she was able to link Winforecast to data in management spreadsheets, such as sales reports, so cash flow forecasts were automatically updated.
She also agrees with Mr Mews that banks are more comfortable with the integrity of the forecasts.
MYOB M-Powered invoices was originally launched a year ago as the customer payments service.
It builds on invoicing features that are already in MYOB software and is designed to help businesses offer three different payment mechanisms: BPAY, credit card by phone and payment in person at Australia Post.
The first two options are available 24 hours a day, seven days a week, via the Internet or a 1300 call centre.
They provide an alternative to cheque payments, with the added benefit that payments are credited immediately rather than having to wait for cheques to be cleared.
These payment options also cut down the amount of paperwork, not to mention visits to the bank to deposit cheques.
Businesses using the M-Powered service will receive email updates with details of all invoices that customers have paid through the service.
© Business News 2017. You may share content using the tools provided but do not copy and redistribute.