Cash management: this is how your organisation gets it on track

Cash management - 7 min

There are still companies that fail to keep track of small transactions structurally and in detail. Remarkable, because thorough management of daily expenses, cash management, is crucial for any organisation.
Indeed, when added up, all those small amounts can add up to big costs. And if registration processes and structures do not function properly, errors lurk.

Don't you have a grip on it? Then this can lead to unexpected setbacks, a distorted picture of (financial) reality or even compliance issues. Therefore, invest in sound cash management.

❯  What is cash management?
❯  The end of the small greenhouse?
❯  Sound organisation of cash is very important
❯  This is how you organise your cash flows
❯  Are you already using cash management software?
❯  Innovative online cash management support

What is cash management?

Cash management is the system that focuses on financial logistics within organisations. Its goal? Keeping a grip on petty cash by streamlining, monitoring and managing cash flows.
Organisations that have their cash management have in order, always know exactly where their cash flow and working capital stand. In addition, a well-organised system provides all kinds of leads to optimise the liquidity position, minimise (interest) costs of cash flows and maximise (interest) income.

The end of the small greenhouse?

Small and large organisations across the Netherlands still work with it: the petty cash, a limited reserve cash For ad hoc expenses.
To arrange a bunch of flowers for a colleague, refuel a company car or settle lunch with a potential client, for example. If you have a safe of cash on standby, you can advance daily business expenses quickly and easily.
If your organisation consists of several offices, you can allocate a budget per location and make an employee responsible for cash management. This person keeps track of which colleagues spent what, and on what. Receipts come to that person. And if necessary, he or she will request a new budget.

By skipping the often time-consuming process of requesting advances and not putting the finance department to work for every little thing, decisions can be made faster at the departmental or office level.
Sounds good right? It certainly is on paper, but also a bit old-fashioned perhaps. Working with cash involves risks, and a lot of hassle and regulation. Hence, more and more organisations are going cashless.

Sound organisation of cash is very important

In theory, you can easily manage trivial day-to-day business expenses with a small treasury. In practice, however, many finance teams are stuck with it.
Indeed, a common problem is that effective management of small greenhouses deteriorates over time. And there is a good explanation for this:  

• Responsible managers often do not have an accountancy background. 
• Cash management is usually not part of their core business. 
• The administrative burden of keeping cash books is high.
• Many organisations still work with physical receipts and cluttered, incomplete spreadsheets.

Moreover: because effective checks and balances on small cash accounts are regularly missing, the risk of errors (and even fraud) is higher.
When undesirable situations arise, they sometimes remain undiscovered for a long time. They often only come to light during external audits.
Fortunately, there are all sorts of ways to get your cash management on track and manage business expenses more effectively.

This is how you organise your cash flows

Do you want to structurally improve your cash management? Then don't start putting out fires within your organisation like a headless chicken.
That way, you create some peace in the short term, but the underlying issues are likely to remain.
Better to start at the basics:

• Calculate how much time (and therefore money) cash management costs now. 
• Find out how many man-hours are spent transporting cash to different locations.
• For each petty cash, make an overview of the number of users and the number of payments per account period.
• Compare: what is the advantage of one central treasury versus multiple local treasuries? Can payments and certain administrative steps be digitised and/or automated? 

Whatever you do, keep focus!
By setting clear priorities, working on one element at a time and involving the right people at the right times, you work towards the solution in a more focused way. 
For example, start with a new structure for expense claims. Think about what it takes to book and process expenses faster.
Digitisation is obvious. Because with it, you can generally make a big efficiency gain. 

Are you already using cash management software?

It is as plain as day: for a healthy financial organisation, it is hugely important to keep track of small expenses neatly and record all transactions accurately. 
A digital cash management system can help.
With such an (online) platform, you automate time-consuming tasks and reduce error margins by adding the right checks and balances.
This will give you more control over employee spending:  

Create an expenses policy

With a clear expenses policy, your organisation can settle expenses quickly and neatly. Set out, for example, the purposes for which the petty cash can be used, what the limits are and how quickly expense claims are paid out. 

Digitise expense records

By digitising small cash registers, you ensure that employees use them more quickly and easily. For example, there are all kinds of online tools that allow them to upload photos of physical receipts to your records.

Tune accounts daily

Keep a grip on your financial transactions by reconciling accounts every day. Consider using an app to track daily expenses. Then you can be sure you are always working with accurate data.

Track spending in real time

By tracking expenses in real time, you significantly reduce the chances of company budgets being exceeded.
With the right digital solution, users can submit receipts online immediately after purchase and record expenses automatically when they checkout something. 
This allows you to see exactly when budget limits are in danger of being exceeded.

Innovative online cash management support

However cash management is organised within your organisation, chances are you will take your business expense management to the next level with SimpledCard.
Thanks to the user-friendly online platform, you no longer need cashbooks, as the recording, accounting and auditing of transactions is completely digital.
Authorised employees will receive a prepaid debit card with a personal spending limit, which can be set by finance colleagues at the touch of a button modified. 
Expenses can be viewed anytime and anywhere in real time. And receipts for claims are easily stored within the secure online system.
This saves your employees a lot of time, your finance department always keeps an overview and you can make decisions at lightning speed.

Contact us about cash management

Wondering how to easily implement SimpledCard within your organisation, offering employees a secure alternative to cash and giving the finance team control over business spending?
Our financial experts will be happy to review with you which cash management solutions suit your organisation, needs and ambitions.