La treasury It is the heart of any company, no matter how small.
That is, the flow of funds must be generated adequately so that the company always has sufficient funds at its disposal to meet its payment commitments.
It is not the same for a company to be profitable than for it to generate liquidity. A company can sell a lot, but if it doesn't charge for sales, it has a problem. And if he collects them, but he does so late, then he continues to have a problem that could lead to the closure of the company.
For this reason, any company and entrepreneur live in constant risk that requires dedication to control their treasury.
How to anticipate the need for liquidity?
When customers are late with payments, when the unexpected arises or simply when there is an expansion that requires investment of funds, it may be too late to achieve the necessary liquidity.
How then can an entrepreneur of a small business anticipate the need for liquidity?
You need a monthly Treasury Budget
To face liquidity challenges, every company is obliged to plan its treasury and maintain a certain level of "savings".
When a treasury budget is made and followed regularly, it is precisely known what level of liquidity is available to take the following steps. Adopting a pension management is the most effective for the good control of the company's funds.
Make a treasury budget monthly annual is the first step. In it, the receipts and payments per month of each budget item are positioned, taking into account lags from the sale and purchase to the collection and payment, respectively, and add the corresponding VAT to the budget concepts of income and expenses of the general budget.
One must also take into account the financing items (loans, subsidies, capital contributions, etc.), investment or items that are sometimes forgotten such as interest payments, social security, taxes...
With the treasury budget, the entrepreneur can schedule the credit needs that you have to obtain for certain periods and amounts.
Reinforce planning with a Daily Treasury plan
To reinforce planning, this budget is then transferred to a daily treasury plan, making a shorter forecast of 30, 45, 60 days.
In the treasury plan, collections and payments are already certain operations, they are accounted for with their corresponding expiration date and it is possible to know exactly (theoretical for collections that depend on clients) their amount of payment or collection, salaries, taxes etc
With the treasury plan, the entrepreneur can see what is really happening every day and analyze the deviations and the impact they will have on your actual cash.
Every day you can compare the forecasts with the reality of the bank to have a real position of the day in your bank accounts and a projected position for the following 30, 45, 60 days.
This "conciliation” of the forecasts will also allow you to detect banking errors, conditions not respected or improper operations.
Control forecasts with Excel?
Tools such as Excel allow you to do this planning, but its monthly, weekly or daily follow-up, depending on the complexity of the company, can be more or less expensive.
Indeed, obtaining collection and payment forecasts can be very laborious and
the collar will cost more than the dog
to the businessman.
treasury apps
Today there are tools dedicated to this such as SeeDCash that allow you to dedicate just a few minutes a day to have a precise control of liquidity and make financing decisions as far in advance as possible.
SeeDCash is an application for Smartphones and Tablets that generates forecasts following a predictive model that uses historical data or that allows them to be created manually or through automatic integration.
Every day the application intelligently reconciles forecasts with bank account movements and presents liquidity indicators and alarms.
Thus, the businessman can see at any time if he is going to lack liquidity and can request financing for your company for the precise term and amount, avoiding overfinancing and incurring higher financial costs that reduce profitability.
Solve your treasury problem quickly
In these cases, it is essential to have a quick solution like the one offered by WorkCapital, which also advises you as experts to boost the company's finances.
