Body_TradigitalCash.jpgby Cindy Waxer.

Smart cash management is critical to a small business’s survival. Keeping tabs on profit margins, tracking working capital, managing expenses—they’re all critical steps a growing company must take to keep employees paid, customers satisfied, and the business afloat.

Fortunately, there’s a crop of online budgeting tools that help small businesses streamline their budgeting, forecasting, and reporting processes with the click of a mouse. Intuit, Centage, and Sage are but a handful of the vendors now offering out-of-the-box, digital cash-management tools. 

However, the proliferation of Web-based budgeting solutions isn’t cause to toss aside more traditional tools like Microsoft Excel spreadsheets. In fact, many companies find that a combination of time-tested budgeting products and cutting-edge cash management tools is the best answer to effectively managing a company’s finances.

Just ask Mark Benson. He’s the controller at Dial One Wolfedale Electric (DOWE), an electrical contractor in Ontario, Canada. Rather than abandon age-old tools, DOWE relies on a mix of both traditional budgeting products like whiteboards, as well as software solutions for comprehensive management of its cash flow.

Read on to discover the money management tools every small business should own, and the platforms that support them, from old-school spreadsheets to sophisticated software programs.

PQ_TradigitalCash.jpgAn automated revenue-planning model

A revenue-planning model not only helps a company track the amount of money it’s generating but how that figure will change as circumstances fluctuate. Sure, Excel spreadsheets feature plenty of rows and columns for forecasting. But Benson prefers software to gain a long-term perspective on finances. “We use the long planning horizon provided by Budget Maestro to look out over five years,” he says. “That way we can see the implications of receivables, cash, and the assets we need on our budget. In the end, we get a better, fuller picture.”

Cash flow forecasting with software

According to Charles H. Green, it’s not enough for small businesses to simply manage revenue projections. A small business financing expert and author of The SBA Loan Book, 3rd Edition, Green says growing companies can greatly benefit from a cash flow management solution. “Revenue is just one component of growth,” he says. “If you increase your sales 25 percent, you might think you’re going to have all this extra cash coming through. But if you dig deeper, and assess the cost and timing of your finances, you’ll be better able to determine if you can afford and absorb growth.”

Benson agrees. He depends on Centage’s Budget Maestro platform to anticipate DOWE’s cash flow influxes and bottlenecks. “[Our software] tells us what the long-term outlook on cash is,” he says “That’s important because you don’t want to find out at the last minute that you need more money. You need to know that well in advance to take the appropriate actions. For example, you might need to adjust your credit line or change your sales terms.”

Manual manpower planning

Not every budgeting activity requires a Web-based solution, though. Exhibit A: Benson still relies on Excel spreadsheets to determine “whether we need more people or fewer people” on our staff. Not only can Excel spreadsheets efficiently keep track of payroll expenses, but they can also be used to better allocate human resources during peak seasons.

Green, too, says age-old tools like spreadsheets are the perfect fix for budgeting manpower. After all, he says, “You can see more on your own screen and respond faster than you can with an online tool. A lot of these online tools make you go from page to page so you can’t see how one entry may affect other numbers right away.”

Online expense budgeting

When it comes to maintaining a fleet of 40 vehicles, however, Benson opted to replace the company’s traditional computer spreadsheet with an online tool for expense budgeting. “We’re now able to load the cost of each vehicle and related maintenance fees into the system as individual data records for greater detail. Plus, it’s all in one place rather than spread out among various spreadsheets.”

Green says that by keeping careful track of spending habits, a small business like DOWE significantly minimizes the need to “stretch out” its finances just to survive. “More companies fail because of excess growth than inadequate growth,” warns Green. “You can figure out a way to lower your costs to get by but it’s when you have growth—and money to spend—that people start getting in over their heads.”

Whiteboarding sales projections

From creating a marketing plan to forecasting next year’s sales, Benson says a traditional whiteboard is an ideal “non-digital tool we use to post sales numbers. It’s big, easy to change, and it keeps people who are not computer literate involved. Plus a whiteboard helps facilitate things in a group meeting.”

But that’s not all. Benson says many of today’s digital budgeting tools entail “a steep learning curve. They’re so different from anything we’ve seen that it often takes a while to get your mind around the concept of how it functions.”

Without a doubt, planning for the future is becoming a digital disclipline for many small businesses. But that’s not a reason to discount time-tested tools. A combination of both is often the answer to keep a small business’s money matters under control.


Of course, since the details of each business situation are unique, it’s wise to seek the advice of a qualified financial planner or certified public accountant before making any significant changes to your small business’s cash flow management system.

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