Back December 2, 2016

Why Fast Growing Companies Need a Tool Like ThinkOut

All businesses, no matter how large, need cash flow management. We won’t insist again on the reasons; instead, we’ll point out why using a cash flow management platform is particularly recommended for fast growing companies.

 

Every startup founder’s dream is to see his business grow into a steady, expanding company. With the way technology and the economic environment develop nowadays, the growth of a company happens at warp speed compared to previous years. There is a good reason why “fast growing companies” gets over 6 million results on Google. It is a phenomenon that can’t be ignored, especially by the managers of such companies.

 

Behind the captivating image of such growth, however, lies the less enchanting reality of costs to be covered. Growing, as opposed to scaling, implies that resources and revenue are added at a similar rate. This is generally the case for professional services companies that need to hire more people when they gain a new client or a larger project. The company grows and so do the costs. Managers still need to balance revenue and expenses and watch for that Zero Cash Date, in order to keep the company running.

 

Here’s where a cash flow management tool such as ThinkOut becomes essential. Growth doesn’t just happen overnight; it needs to be planned ahead, anticipated, thought through. In the project-based activity, nothing is 100 % sure. A project may just be abandoned at half way; a long awaited, consistent payment may get delayed. Meanwhile, those new employees and the rent for the larger office still need to be paid. Unless the manager has already foreseen such situations and prepared a backup plan together with some cash reserves, the whole growth euphoria turns rapidly into a cold shower in the middle of a winter day.

 

Helping with the planning ahead and making sure you don’t run out of cash is what ThinkOut does best. It makes it easy to forecast the movements of the company’s cash, in order to be ready to act when things don’t go as expected. Keeping track of the cash flow is handy; you just need to enter the values into an already set cash plan; not to mention that other colleagues can be invited to fill in the cash plan. There is a lot of flexibility for how in detail you want to go (timeline view, currencies operated, transactions differentiated by the account used).

 

The major advantage is that managers can easily build and compare scenarios, starting from the current cash plan. The chart lines point the cash evolution within the chosen timeframe and when the company’s cash is about to get below 0. In addition, the Analytics section displays more charts to help better understand how income and expenses are distributed over time and how they need to be handled.

 

To sum up, ThinkOut is great for managers of fast-growing companies because it helps to keep a good control over what happens to the cash resources. But no matter what tool you feel comfortable with, the most important thing is to keep a close eye on the cash flow, forecast and make sure you have a backup plan in your pocket.