Is a cash flow statement in Excel useful or is there a better alternative? Getting a grip on cash flow means getting a grip on your business. As a CFO, controller or FP&A analyst, you know how important reliable financial data is. But how do you keep a grip on your cash flow without getting bogged down in error-prone spreadsheets or complex software? Does your company rely on Excel? Then discover the pros and cons of a cash flow statement in Excel compared to automated systems.

In this article, we compare both methods for you, allowing you to discover exactly how Excel works as a cash flow management tool. But also where its limitations lie. Why do automated systems offer a more efficient alternative? Answers to this question and more, you will discover in this blog post.

This article in 30 seconds

• Getting a handle on cash flow is critical to financial stability.
• Excel is useful for small businesses, but falls short when dealing with complex cash flows.
• Large companies (SMEs, SMB+ and corporates) need real-time insight to avoid liquidity problems and inefficient financial planning.
• Excel offers flexibility and is low cost. On the other hand, it is error-prone and time-consuming, due to manual entry.
• Lack of real-time updates in Excel leads to outdated information and wrong financial decisions.
• Collaboration in Excel is difficult due to version control issues and security risks.
• Automated systems, such as MaxCredible’s, provide accurate and up-to-date cash flow statements.
• MaxCredible reduces manual input and errors through automated invoice processing and personalized payment reminders.
  • Real-time insight and reporting with Tableau support quick and informed decision-making.
  • Seamless integration with more than 800 ERP and accounting systems (such as Exact, AFAS, and SAP via API) ensures up-to-date data and fewer errors.
  • MaxCredible’s functionalities are scalable and prepared for changing regulations and e-invoicing.
  • With MaxCredible, you benefit from automation that speeds up payments by up to 50% and saves up to 80% time on repetitive tasks.
• For accurate cash flow statements and efficient processes, an automated system is the best choice.
• Request a demo with MaxCredible and find out how to get more control of your cash flow!
  • ☎️ +31 (0)20 344 9070
  • 📧 or e-mail to: sales@maxcredible.com

The importance of cash flow management for medium and large companies

For small businesses or organizations with simple cash flows, Excel can be a great solution. Large(er) companies need a clear understanding of incoming and outgoing cash flows. Does a company not have this? Then it runs the risk of payment problems, liquidity shortages and even operational restrictions. Therefore, it is important for financial professionals to have accurate and real-time data on their cash flow at all times.

This is because cash flow management directly affects operational activities. Are payments coming in late? Then that can have major consequences. Consider, for example, investment opportunities, creditor payments and even employee salaries.

Especially in medium and large enterprises, where cash flows are more complicated, greater control over cash flow is essential. Only then can financial stability be ensured, and strategic decisions be substantiated.

Without a good cash flow statement, risks arise:

• Unforeseen liquidity problems.
  • An incomplete picture of outstanding invoices can lead to account tightness, delaying important payments.
• Inefficient financial planning.
  • Without reliable data on expected revenues, it is difficult to plan future expenditures and investments.
• Disrupted customer relationships.
  • When companies suffer from late payments, they have to remind, dunning and sometimes even use collection agencies. This can worsen relationships with customers.

An up-to-date cash flow statement will help you avoid financial surprises. Many companies use Excel, but this program has its limitations. Especially with regard to real-time insight into incoming cash flows.

Another solution is to use automated systems. Consider credit management software such as that provided by MaxCredible. Automated systems offer a more effective alternative. It provides complete and up-to-date insight into outstanding invoices. It also allows you to easily see the payment behavior of your debtors.

A high accounts receivable balance slows your cash flow and increases financial risk. Find out how to lower your accounts receivable balance and improve your cash flow in this blog.

What is a good cash flow statement in Excel?

Excel has been a widely used tool for tracking cash flow statements for years. Many financial professionals rely on spreadsheets. It’s how they track income and expenses, create forecasts and budget. But how effective is Excel when cash flows become more complicated?

Basic knowledge of cash flow management in Excel

Cash flow statements in Excel are tables or dashboards that display a company’s cash inflows and outflows. This provides insight into the liquidity position and helps plan future payments and investments.

Commonly used functions and formulas in Excel for cash flow management are:

• SUM() function.: For adding income and expenses.
• IF() function.: For applying conditions, for example, in payment scenarios.
• VLOOKUP()/XLOOKUP(): For searching customer payments or open invoices in a dataset.
• PivotTables: For analyzing and grouping cash flow data.

Benefits of using Excel for cash flow management

• Excel is flexible and customizable
  • You can completely customize your cash flow model and add specific formulas.
• It is widely applicable.
  • Excel is well known among financial professionals and used in almost every organization.
• There are no additional software costs.
  • For companies that do not want to make large IT investments, Excel is an accessible and inexpensive solution.

Of course, there are drawbacks. Excel mainly requires manual input and is therefore error-prone. Moreover, it lacks real-time insight, which is a major drawback when managing incoming cash flows.

Challenges and limitations of cash flow statements in Excel

Excel is a powerful and flexible tool. Nevertheless, it brings limitations especially for more complex cash flows. Many businesses depend on accurate and up-to-date cash flow statements. Excel simply does not provide this real-time insight. Does your business depend on these statements? If so, working with Excel can be a hindrance.

Manual input errors

Manual entry increases the risk of error and is time-consuming, especially in growing companies with complex financial flows. A small typo in a formula or an incorrectly copied cell has a major impact on the accuracy of the cash flow statement. It can even lead to wrong financial projections and incorrect decision-making. This must be prevented.

Lack of real-time updates

The lack of real-time data updates is one of Excel’s biggest limitations. This is because financial professionals have to manually update spreadsheets. This is the only way they maintain an up-to-date view.

As a result, there is a risk that decisions are made based on outdated information. The consequence? The financial health of your business is adversely affected.

Time-consuming maintenance and complexity

The larger and more complex a business is, the more difficult it is to work effectively with cash flow statements in Excel. Not only must the formulas and macros be maintained accurately, but the errors must also be detected. This takes an awful lot of time. And time costs money.

Limited cooperation and accessibility

Another major drawback to Excel is that Excel files are often stored locally. Sometimes they are shared via e-mail. This makes collaboration very difficult. Version control is problematic, especially when multiple team members are working on the same spreadsheet.

There are also the security risks. Data breaches or unauthorized changes are difficult to prevent in Excel.

Because of these limitations, Excel is often not the best choice for companies that need accurate and up-to-date cash flow management. For them, an automated system is a better alternative.

Automated cash flow statements with MaxCredible’s credit management software

MaxCredible’s credit management software minimizes manual input and reduces errors through automated processes. Personalized payment reminders, automatic invoice processing and real-time visibility into outstanding items keep your cash flow accurate and reliable.

Real-time insights and reporting with Tableau

Thanks to its integration with Tableau, MaxCredible’s software provides real-time updates and in-depth analysis. You get instant insight into incoming cash flows, enabling quick and informed decision-making.

Seamless integration with accounting and ERP systems

MaxCredible’s software links to more than 800 systems, such as Exact, AFAS and SAP via APIs. This means automatic data synchronization and always up-to-date cash flow statements.

Scalability and future-proofing

MaxCredible grows with your organization and prepares you for changing regulations around e-invoicing, thanks in part to partners such as Unified Post. Payment behavior and payment history within MaxCredible enable accurate forecasting and strengthen your cash flow management.

Efficient accounts receivable management is the key to healthy cash flow. Find out how to speed up payments with streamlined accounts receivable management here .

What is the best option for your business?

Excel offers flexibility and low cost, but also has major drawbacks such as error proneness, time-consuming maintenance and lack of real-time insights. MaxCredible eliminates these limitations through automation, real-time reporting and seamless integrations with accounting systems.

For companies that depend on accurate cash flow statements and efficient processes, an automated system like MaxCredible’s is the best choice. Not only does it offer immediate savings in time and error reduction, it also enables finance teams to work more strategically.

With MaxCredible, you benefit from invoices being paid up to 50% faster. You also save up to 80% of your time on repetitive tasks that are automated.

Do you want more control over your cash flow and benefit from real-time insights? Request a demo of MaxCredible today and discover how your business will become more efficient with an automated cash flow statement.