Save & Close Optimize cash flow management: Practical tips for finance leaders

One of the biggest challenges of navigating rapid growth is finding ways to optimize cash flow management. It gets tricky trying to balance a growing workforce and competing demands, with the need to keep escalating costs under control. You've got a big future ahead and now is an ideal time to put some best practices in place that can help you stay on track for success.

When clients ask me for tips on how to manage cash flow, I encourage them to focus on the following best practices they can put into action quickly.

Centralize control for decentralized spending

As an innovation economy business, the last thing you want is bottlenecks that slow down productivity. Think about your operating expenses. Across your organization, more needs are sprouting up such as laptops for remote workers, more lab equipment, additional seats for SaaS subscriptions. As you launch and promote products, your subject matter experts are attending more industry events and marketing scope expands.

How do you empower employees to satisfy their expense requirements, while ensuring the finance team can maintain guardrails and oversight over spend to optimize cash flow management?

The key is to choose a corporate card with an integrated expense management platform that makes it easy to issue cards on the fly and control spend with custom limits tied to business rules. For instance, you can issue virtual cards for project-based purchases or specific business trips with a fixed budget and timeframe to prevent over-commitment.

Virtual cards give you a more efficient, secure and policy-controlled way to enable teams quickly. No more waiting for plastic and potentially lost or stolen cards. From a centralized platform, you can instantly issue virtual cards, each with a unique random number, for a given user, role, department or purpose-specific category of spend. It ensures your workforce can handle procurement and other operating purchases with the flexibility and immediacy of being decentralized. Yet all the spending is essentially anchored by the finance team, who can auto-enforce budgets and expense policies, as well as automate approval routing and reconciliation.

And by conjoining these activities through the card program’s AI-powered spend management platform (like SVB’s), everyone gets a time-saving bonus. With the platform’s efficient mobile app, people can submit receipts and expenses, and the system automatically generates expense reports to dramatically simplify reconciliation.

As a growth strategy, it’s a powerful shift from reactive policing to proactive cash flow management.

Reinvest rewards to optimize cash flow management

Like most businesses, no doubt you want a corporate card that rewards your spending with cash back. As your company scales up procurement, cloud infrastructure, and other operating expenses, your card rewards can translate into a valuable monthly revenue stream.

What are some innovative ways to put that income to work? Instead of rolling it back into monthly bill pay as a passive gain, think of it as a performance lever.

Consider the money you save in cash back statement credit. Rather than using it to pay the next month's expenses, I've seen clients with mature card programs earmark those savings for other strategic uses. For example, if they don't need the cash right away, they park it in short-term, high yield CDs to earn interest and boost liquidity. Other companies turn cash back or rewards points into productivity, such as investing in R&D sprints without affecting general working capital.

This approach for leveraging your corporate card can help you better manage cash flow as your business grows.

Leverage card data to benchmark and optimize cash flow

Another important factor in how to manage cash flow as you scale is to understand how your business spending compares to other companies like yours. First, tap into your own payment data for analytics from your corporate card's expense management platform. Capture insights such as your utilization by spend category and monthly rewards yield.

Next, ask your card issuer to provide peer benchmarks from similar companies. Comparing the data can help you identify where your spending aligns with others or is out of proportion and may need to be reined in. This analysis can provide a basis for setting annual card program goals that ladder up to broader finance KPIs, such as lowering operating expenses for cost-of-capital reductions.

Successfully navigating growth takes an ongoing balancing act of strategies to optimize cash flow management. Talk with us about how SVB corporate cards and our dedicated expertise can help you at every stage.