The 12 best cash management solutions for CFOs in 2024
Pick the right cash management platform for your business.
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1 minute
September 26, 2024
Cash management is a critical corporate finance process aimed at helping businesses fund operations and invest cash reserves to boost the bottom line. However, the cash management process can take time and effort.
This article defines cash management, outlines best practices, explains how automation can streamline the process, and shares additional information about top cash management solutions for business owners and finance teams.
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Cash management is the process of forecasting and monitoring cash inflows and outflows to generate sufficient cash inflows to pay all required cash outflows and maintain proper financial health.
The components of cash management are:
The cash management goal is to maximize excess cash balances and to control cash payments.
Every business needs cash to operate and to fund company growth. Effective cash management helps businesses complete these tasks:
Cash management helps a business collect cash faster (by quickly identifying slow-paying customers) and forecast future cash balances to fund operations accurately.
The funds can be invested to earn a higher yield if excess cash is available. Internal controls over cash lower the risk of theft, and bank accounts can be quickly reconciled at month end. Funding all business cash needs may be possible without raising additional capital.
You can implement an effective cash management system using these solutions:
Monitor all bank account balances in a single location so that managers can calculate the total available cash balance.
You should put internal controls in place to protect assets, including cash, from theft.
There is a higher risk of cash theft than any other asset because of the number of cash transactions in a typical business. A company may have dozens (or hundreds) of debit entries, direct deposit payments, and other online banking transactions.
Segregation of duties is an effective control that protects cash from theft.
To illustrate, assume that Julie owns Standard Logistics, a shipping company. Standard separates these duties between three different people:
Keeping these three duties separate prevents any one person from having too much control over the cash account. For example, John reconciles the cash account but cannot sign checks or have custody of the checkbook.
Every business should have these controls in place to protect cash from theft.
Accounts receivable (AR) is extending credit to customers who don’t immediately pay in cash. If your AR balance is growing, you’re collecting cash more slowly.
You can take some of the following actions to reduce the average AR balance even as you grow sales.
New customers do not have a payment history with your business and may become slow-paying clients.
Many companies perform a credit check before doing business with a new customer to avoid this issue. This is common for B2B firms but may not be practical for B2C companies with hundreds of retail customers.
If you sell large ticket items or produce customized products and services, you may ask for an initial deposit on each purchase. Asking for a deposit signals whether or not the customer will pay on time. If you get customer pushback on deposits, view it as a red flag.
Make the payment process as seamless as possible. Send invoices electronically and give customers the option to pay invoices online.
Successful businesses have a formal process to follow up on late payments. For example, your firm may email customers when an invoice is 30 days old and call clients if an invoice reaches 45 days old.
The need to follow up with a customer is another red flag. If a client has to be contacted more than once regarding late payments, consider not doing business with them. The time and effort you spend following up on a late payment may not be worth the profit generated by the sale.
If your sales are increasing, check to see if your AR balance is increasing faster than sales. If so, you’re making more sales to customers who are slow to pay. The biggest takeaway is to monitor AR closely.
Working capital is (current assets less current liabilities) and measures a firm’s ability to generate sufficient cash inflows to pay all current liabilities. In this context, “current” is defined as 12 months or less.
Current assets include cash and assets that will be converted into cash within 12 months. Accounts receivable and inventory are current asset accounts.
Current liabilities, including accounts payable and other short-term financial obligations, must be paid in cash within 12 months.
When you closely monitor the components of working capital, you can generate enough cash inflows to operate your business.
These software features will speed up data collection and analysis and help managers make more informed decisions:
A fully integrated platform ensures that every cash transaction can be tracked and reviewed in real-time.
Transfers between bank and investment accounts are fully automated, and month-end reconciliations are performed electronically. Here are two common transactions that need to be monitored:
These controls reduce the risk of fraud, and management can detect unusual transactions immediately and follow up.
All invoices can be sent electronically, and customers are provided options to pay invoices online. The software can send automated payment reminders to customers when invoices reach a specific number of days outstanding.
A platform like Rho offers cash management and capabilities like AP, banking services, expense, and corporate cards – all in one platform.
Users can monitor every type of cash transaction in real-time. Financial officers can create reports to monitor cash and calculate excess cash for investments.
With Rho, managers have full control over cash flows and spending.
Cash flow management software is more complex, requires more data, and must fully integrate with your banking and accounting systems to be effective. On the other hand, cash management software is less complex and can be managed using less data.
Cash flow management is managing accounts receivable and cash outflows to pay vendors and other invoices. This includes:
On the other hand, cash management refers to decisions made about a specific cash balance at a point in time. Questions for cash management include: How much excess cash can be invested, and how is cash used to fund business operations?
Rho is a financial operating system that helps businesses boost their profitability. The platform helps automate accounts payable and treasury management, helping lean businesses generate yield on their cash reserves while maintaining liquidity and security.
Rho offers a comprehensive set of solutions built into our platform that make it easy for companies to achieve this:
Once onboarded to Rho, Rho Prime Treasury clients select a custom investment policy tailored to their business’s unique liquidity and security needs, supported by Rho’s in-house investment team.
Rho's platform then actively adjusts customers’ portfolios of government securities like U.S. Treasuries to earn market rates while monitoring operating account balances and automatically transferring money as needed.
Rho integrates with QuickBooks Online, Oracle NetSuite, Microsoft Dynamics 365 Business Central, and Sage Intacct.
Rho also supports flat-file CSV exporting, so you can automatically tailor transaction categorization to your business needs. Read more about our accounting integrations here.
The Rho platform is free, though the Rho Prime Treasury capability does have a small annual management fee which depends on the amount invested, but caps out at 0.60%.
Causal provides software to create and build business plans, forecasts, and financial models. The financial planning and analysis tool allows managers to build integrated models that drive revenue and expense projections.
Users can pull data directly from an accounting system and combine it with operational data from your CRM and data warehouse to build fully integrated models. Users can analyze multiple business units in one platform and track budgeted vs. actual results.
Integrations with QuickBooks, Xero, NetSuite, Sage Intacct, SAP S/4HANA, and Microsoft Dynamics 365.
Causal has a Free version that a single user can access and a Launch pricing level of $250 per month. The Growth pricing level requires you to book a sales call for a specific quote.
Causal is strictly an analytical tool and does not offer banking, treasury, or payment services. The platform has a steep learning curve, and the software can be expensive.
Rho provides a seamless financial management solution that combines cash management, banking, treasury, payments, and other tools in one integration platform. Rho’s platform is free to use.
Tesorio's cash flow performance platform helps businesses make cash flow predictions in real time based on trends and other analyses. The accounts receivable solution allows companies to collect cash faster by automating the collection process.
Features
The cash flow management tool aggregates all bank accounts and provides data on a single platform. Users can forecast cash flows, perform scenario planning, and generate reports. Customers can focus on the most strategic accounts to maximize collections on receivables.
Tesorio has ERP integrations with NetSuite and Sage Intacct.
Tesorio requires you to book a sales call for a specific quote.
The Tesorio platform has glitches and login issues, which slow down productivity, and Tesorio charges platform fees. Rho provides bank account, cash management, and a reliable treasury management solution in a single platform with no platform fees.
Agicap offers cash flow forecasting and management tools, and automation to speed up collections on receivables.
Users can forecast and monitor cash flow by entity or in a consolidated view. Managers can compare the cash flow forecast to actual results in real time. The software can synchronize and categorize all banking transactions.
Businesses can reduce late payments with automated collection practices. Build a dashboard based on your KPIs, and export reports to stakeholders.
Integrations with Xero, Sage, SAP, Microsoft Dynamics 365 Business Central, NetSuite, and QuickBooks.
Agicap requires you to book a sales call for a specific quote.
Agicap’s user interface is not streamlined, and could be more intuitive. Rho provides a frictionless user experience, and offers a single platform for cash management, banking, treasury, and other financial services. Agicap charges platform fees, while Rho does not charge platform fees.
SAP helps businesses optimize working capital and automate operations with integrated treasury management. A real-time, accurate, and business-wide view of cash and cash flows is critical for managing liquidity effectively.
The SAP S/4HANA Cloud solution for cash management enhances decision-making by centralizing bank account and cash flow management. Access cash positions and forecasts based on criteria like currency, company, bank, and account. View global bank balances and liquidity forecasts in real time and improve liquidity and cash visibility.
SAP S/4HANA Cloud integrates with other SAP software platforms, such as Financial Accounting and Treasury and Risk Management.
SAP requires you to book a sales call for a specific quote.
SAP is expensive and time-consuming to implement, and SAP may not offer integrations with other ERP providers. The learning curve is very steep, and users must invest much time to use the system.
Rho offers a cash management solution that is integrated with expense management, banking, and treasury within one intuitive platform. Users can implement Rho quickly, and there are no platform fees.
Kyriba provides treasury management, risk management, payment processing, and working capital management to maximize company liquidity. The platform integrates with several ERPs.
Kyriba’s cash and liquidity management solution offers cash management, liquidity planning, financial transaction processing, and the ability to manage banking relationships. Users can generate real-time reports and use forecasting tools. Reconciliations are fully automated.
Kyriba has ERP integrations with Oracle Fusion, NetSuite, SAP ECC 6.0, SAP S4/Hana, and Microsoft Dynamics 365.
Kyriba requires you to book a sales call for a specific quote.
Implementing the Kyriba platform is time consuming, it takes time for staff members to learn the platform and to fully utilize all the features. Rho provides an intuitive platform that is simple to learn and much easier to implement.
Kyriba charges fees, and there are added costs for new users and to add more functionality. Rho does not charge platform fees.
Coupa provides solutions for procurement, invoicing, expenses, payments, and treasury management. The company also offers travel and expense management, supply chain planning, and contract management.
Coupa cash and liquidity management users gain end-to-end visibility of cash and spend to improve cash forecasting. The platform safeguards liquidity with fraud controls and drives efficiency by automating cash management.
Automatically see your global cash position by entity, bank, and currency, and identify trends with a rule-based categorization of transactions.
Coupa has ERP integrations with SAP, Oracle NetSuite, and others.
Coupa requires you to book a sales call to get a specific quote.
Coupa users may experience glitches with integrations, and there are problems with changing and deleting item and supplier data. Coupa’s mobile solution is fairly new, and the company charges platform fees.
Rho offers a seamless cash management platform, with a number of reliable ERP integrations. The cash management function is integrated with treasury, banking, accounts payable, and expense management. Rho does not charge platform fees.
CashAnalytics automates cash forecasting and cash reporting tasks, giving finance teams a single source of reliable cash flow data
CashAnalytics connects to your ERPs and banks, automating the majority of your cash reporting and forecasting process. Connect to your banks to see all of your cash accounts in one place. Gain deep insight into what's driving short term cash flow with in-depth AP and AR analytics.
Integrations with ERP systems, data warehouses and banking systems through the company’s API integration.
CashAnalytics has four pricing levels, with different pricing plans. The company requires you to book a sales call for a specific quote.
CashAnalytics users may experience slow connections, and the system may generate calculation errors. CashAnalytics charges platform fees that increase as the number of users and business needs increase.
Rho offers a fast and reliable cash management solution that is integrated with treasury, banking, accounts payable, and other services. Rho does not charge platform fees.
Treasury Intelligence Solutions (TIS) provides a cloud-based platform for cash flow management, liquidity, and payments. In 2022, TIS acquired Cashforce, which provides cash forecasting and working capital solutions.
The CashOptix solution offers cash forecasting, working capital management, and automates bank statement reconciliations. These capabilities are focused on providing organizations with 360-degree visibility and control over their global cash positions, bank account structures, and working capital metrics.
TIS has limited ERP connectivity that allows bank statements to be uploaded into an ERP. TIS does not offer fully synced ERP integrations.
TIS requires you to book a sales call for a specific quote.
The TIS user interface is difficult to navigate and is outdated, and implementing the solution can be time consuming. In addition, TIS does not offer full ERP integrations, and platform fees increase as your business grows.
Rho provides cash management, treasury, expense management, banking, and AP within one intuitive platform. Users can implement Rho quickly, and there are no platform fees.
CMS operates as India’s largest cash management company based on number of ATM points and number of retail pick-up points. CMS provides a secure link between banks and other financial institutions, retailers, and corporations who need cash management services.
CMS provides an integrated retail cash management solution with fast reconciliations, and an on-demand reporting module. Users can track cash transactions in real time.
CMS focuses on processing and securing physical cash payments for businesses based in India. The company does not offer all of the components needed for cash management. Users cannot forecast future cash balances, or move cash balances in and out of investment accounts.
Rho provides a complete cash management system that is fully automated, and integrates with banking, treasury, and payment solutions.
Finastra provides lending and corporate banking services, payment processing, cash management, and investment management services.
Finastra’s cash management platform allows businesses to create a dashboard to monitor all bank account activity. Users can manage liquidity using cash flow forecasting. The software is integrated with receivables, payment, and treasury functionality.
Finastra provides automated account reconciliations in real-time.
Finastra cash management does not provide any ERP integrations, based on our review.
Finastra requires you to book a sales call for a specific quote.
Very few users have provided reviews for Finastra cash management. Finastra is strong in the lending industry, but far fewer customers use Finastra. Rho cash management, on the other hand, is widely reviewed and is highly ranked by users on G2 and other review sites.
Rho’s cash management function is integrated with treasury, commercial banking, accounts payable, and expense management. Fusion charges platform fees, and Rho does not.
Nomentia provides bank account management, payments, risk management, and treasury services to customers.
Nomentia offers cash flow forecasting and full transaction visibility. Users can centralize data for all bank accounts and implement workflows customized for the business. Nomentia provides ERP integrations, and users can customize reports or use standardized reports.
ERP integrations with Acumatica, Microsoft Dynamics 365, Sage, SAP, and Oracle.
Nomentia requires you to book a sales call for a specific quote.
Nomentia can be time consuming to implement, and some users experience occasional software bugs. Rho provides a frictionless cash management solution with reliable software performance. Nomentia charges platform fees, and Rho does not.
After reviewing the different cash management solutions on the market, think about the features and tools most important for your business.
And if you still need help choosing the best cash management software, let's make this easy.
If:
All wrapped up in unbeatable pricing and customer support available 24H Mon-Fri, 10-7pm ET on weekends sounds nice to you,
Then, you should consider Rho. Schedule time with a Rho payments expert today!
Competitive data was collected as of January 14, 2024, and is subject to change or update.
Investment management and advisory services provided by RBB Treasury LLC, an SEC-registered investment adviser. RBB Treasury LLC facilitates investments in securities: investments are not deposits and are not FDIC Insured • Investments are not bank guaranteed, and may lose value. Investment products involve risk and past performance does not guarantee future results.