Cash management & cash flow

Anyone running a business knows that things often turn out differently than planned. Initially focusing in one direction, internal and external factors, which were unexpected, can force companies to reconsider or even change their strategy, and often it’s not possible to react flexibly enough to favourable events. Therefore, it’s crucial for entrepreneurs to play out various scenarios and prepare potential strategies. Setting up scenarios can serve as a decision-making aid for strategic alternatives as well as assist in the development of specific strategies in case of unexpected internal and external events. Scenarios are particularly used in financial and liquidity planning to better estimate changes in cash flow and avoid liquidity shortages.

Efficient liquidity planning is crucial for the success of your business. It allows you to better manage your financial resources, identify bottlenecks, and prepare for future financial challenges. But how can you implement this planning effectively without consuming vast amounts of time and resources? Below, we explain what matters in liquidity planning. A template will also make it easier for you to take the first steps.

Cash flow shows how much money flows into your company and how much comes out. It is a key figure for the financial strength and liquidity of your company. In this article, you will learn what types of cash flow there are, how to calculate cash flow, and which methods are suitable for evaluation. You'll also get tips on how to optimize your cash flow and learn how software solutions like Tidely can help you do that.

Everyday life in startups usually can't be called everyday life. Each day is different from the previous one and usually completely different than planned. Decisions must be made quickly, alternative strategies developed and flexible action made possible. To ensure this, employees often assume a high level of responsibility and decision-making power. A majority of the decisions to be made during the growth phase of a startup involve spending — whether subscriptions for important services, office furniture and technology for new colleagues, or simply a team brunch in the office. In the past, you had to go to the boss or assistant every time, describe your request and borrow the only credit card available and the linked hand to send the TAN. This cost time and nerves — something that is inherently scarce in startups.

As a founder of a startup, the liquidity of the company is a crucial issue that you likely deal with on a daily basis. What does the liquidity situation look like? How long will the money last? What adjustments can be made to save money? And what measures can be taken to bring more money into the company? These questions and their corresponding answers are not only of interest to the internal responsible parties but also to external investors like business angels, VCs, etc., who naturally want to stay informed about the current liquidity status of the startup they have invested in.

Since 2020, due to the Corona pandemic, a well-thought-out liquidity management has become indispensable. Entrepreneurs suddenly had to engage intensively with their finances to steer their companies through the crisis. Government aids like short-time work compensation and bridging assistance have helped many to overcome short-term liquidity bottlenecks. Additionally, there are internal company measures, such as optimizing invoice management and making structural adjustments to secure liquidity. With Tidely, you can plan and manage your liquidity in real-time, ensuring that you remain financially well-positioned for the future.