The role of cash management in financial close

Financial close is tough. And it’s a recurring, repeatable process.  

But every finance team has the same goal: to close faster, smarter, and more accurately.  

Just like a building relies on a solid foundation, your financial close does too. When financial close—including pre- and post-close activities like cash management or disclosure management—run smoothly, it influences the accuracy, efficiency, and audit readiness of your reporting.  

Let’s focus on cash management—it plays a vital role in the close process. Strong cash visibility ensures that your financial statements accurately reflect your company’s liquidity and operational health. For most organizations, cash management challenges plague their financial close process—and overcoming those challenges is key.  

What are the cash management challenges in financial close?

Manually managing cash across multiple banks and spreadsheets leads to fragmented visibility. This makes it challenging to track liquidity and build accurate forecasts. The result is missed optimization opportunities, increased borrowing costs, and delays in close as finance teams scramble to verify cash positions.  

For many finance teams still relying on manual cash management, these challenges likely sound familiar:

• Lack of real-time visibility into cash balances.
• Inability to model the impact of AR/AP timing shifts.
• Difficulty tracking burn rate and short-term runway.
• No centralized view of debt or payment obligations.
• High effort to create cash forecasts across entities.
• Limited ability to scenario plan for receivables or disbursements.

These challenges not only slow down cash management but also create a domino effect, impacting the entire financial close process. So, how can finance teams overcome these hurdles? 

Why is cash management important in financial close?

Without accurate cash visibility, finance teams risk delays, errors, and missed opportunities. But with the right tools, you can take cash management from a bottleneck to a strategic advantage.  

Improved cash visibility and automated bank feeds deliver real-time cash positions for finance teams. This minimizes manual updates, speeds up cash reconciliation, and informs liquidity planning to ensure the entire close process is quick and accurate.  

Cash flow management is a key step in financial close because it:

• Ensures accurate, validated cash flow statements.
• Prevents delays in bank reconciliation and ledger accuracy.
• Enables better short-term forecasting and planning.

Strong cash liquidity ensures your financial statements accurately reflect your current cash position and operational health.

What if you had the right software to support your cash management processes? 

Introducing Prophix One Cash Management

Cash Management is the newest application available on Prophix One. In a volatile market, due to uncertainty in tariffs, exchange rates, and currency swings, cash-sensitive industries are especially vulnerable. Manual cash management methods only amplify these risks.

Unlike traditional cash management tools, Prophix One integrates real-time data, scenario modeling, and granular forecasting—all in one platform. This means you can make faster, smarter decisions with confidence.

Here’s a quick look at what you can do with Cash Management:

• Direct cash flow forecasting: Forecast your short-term cash using real transaction data like invoice-level receipts and payments, as well as historical trends and budgeted assumptions.
• Integrated scenario modeling: Create, compare, and manage multiple cash flow scenarios instantly to assess potential risks, opportunities, and operational decisions.
• Real-time cash positioning: Get a daily, accurate snapshot of your cash position across accounts and entities that is automatically updated and fully integrated with planning and actuals.
• Granular forecasts by vendor or customer: Analyze and project cash movements at the most detailed level so you can track your liquidity quickly and confidently.  

Explore Prophix One Cash Management

Ready to transform your financial close process? Take a self-guided tour of Prophix One Cash Management today and see how you can gain real-time cash visibility, improve forecasting, and close with confidence.