Polish company Netwise S.A. joins the collana Group
Home / Polish company Netwise S.A. joins the collana Group The
Paul M.
13 August 2026
A company’s financial situation not only shows whether it is currently able to pay its bills – it also reflects its economic stability and long-term viability. This makes it all the more important to keep track of things. This is precisely where cash flow management comes into play.
What exactly does the term mean? Why should both start-ups and established companies prioritise professional cash flow management? In this article, we take a look at the benefits, tasks and tools that will help you actively manage your cash flows. We’ll also show you how to calculate cash flow – and provide you with practical tips for greater financial control.
Cash flow is a key financial indicator. It shows the payments received and made by a company during a specific period. It therefore has a significant impact on a company’s liquidity, profitability and performance.
In contrast, cash management deals with the monitoring and control of financial resources (cash). It encompasses the planning, control and optimisation of cash flows. The aim of financial management is to avoid cash flow bottlenecks and ensure the company’s financial stability. In practice, four types of cash flow can be distinguished:
| Operating cash flow | Cash flow from operating activities – also known as operating cash flow – comprises all cash and cash equivalents generated by a company’s core business. This includes, for example, revenue from the sale of goods or the provision of services. |
| Cash flow from investing activities | This section of the cash flow statement shows you all cash flows relating to investments – for example, in property, fixed assets, machinery or financial assets. You can use this key figure to assess whether investments were worthwhile and are in line with your business objectives. |
| Cash flow from financing activities | This is where cash flows relating to the financing of your business are recorded. These include, for example, capital inflows from loans or outflows from dividend payments. |
| Total cash flow | If you add together the operating, investing and financing cash flows, you will arrive at the total cash flow. This overall view shows you how your financial flexibility has changed over the period under review. |
With good financial planning, you can keep track of your bank accounts, know how much capital you have available and settle outstanding debts on time. However, an effective Cash flow management can achieve much more. It offers numerous benefits – whilst at the same time protecting you from risks that might arise without targeted management.
The following benefits illustrate why particular attention should be paid to cash flow management:
To cover all costs and meet financial obligations, the business must always have sufficient liquid funds available. Structured cash flow management enables you to keep track of income and expenditure, identify bottlenecks at an early stage and ensure your solvency in the long term.
Based on your cash flow data and forecasts, you can make informed decisions for your business – for example, evaluating investments, calculating scenarios or simulating liquidity trends. Professional cash flow management is also beneficial when dealing with banks: the results enable banks to better assess your liquidity and financial stability, which often has a positive impact on your creditworthiness.
A stable cash flow builds trust – both internally and externally. Companies with sound liquidity planning have better access to equity or debt capital, can make investments more quickly and are therefore in a position to grow sustainably.
A negative cash flow can quickly become a challenge: reduced ability to act, limited growth and, in times of crisis, even insolvency. Through continuous monitoring and management, you can build financial resilience – and make your business crisis-proof.
Without effective cash flow management, you risk low liquidity, confusing financial flows and, in the worst-case scenario, failed payments. This often leads to a lack of transparency – regarding costs, outstanding receivables, bank account balances or payment records.
The problem is that a poor cash flow situation also affects your company’s public image. Banks may question your creditworthiness and reject applications for finance. With less capital, your opportunities for development and innovation will diminish – which will hamper growth in the long term.
This can have serious consequences, particularly when the market changes or in times of crisis: companies that fail to manage their cash flow quickly fall behind and lose their competitive edge.
Cash flow management (also known as cash management) involves recording all income and expenditure, calculating key performance indicators, and planning, forecasting and optimising cash flows. Here you can find out how to go about this step by step.
The cornerstone of any cash management system is the comprehensive recording of all incoming and outgoing payments. You should therefore systematically record every invoice, liability and income – including planned income and expenditure – in your overview. This will provide the basis for forecasts and analyses.
Before you can optimise your cash flow, you need to calculate it. There are two common methods you can use to do this:
This method is widely used in practice as it is quicker to implement – particularly if you already have a profit and loss account. It is based on the net profit for the year, without the need to track individual cash flow movements.
Using this method, companies can calculate the various types of cash flow using the following formula:
| Indirect cash flow = | Net profit for the year – non-cash income + non-cash expenses |
|---|
The following table sets out, amongst other things, the items included in non-cash income and expenses:
| Non-cash income | Non-cash expenses |
|---|---|
| Attributions | Depreciation and amortisation |
| Reduction in the reserve | Increases in provisions |
| Increases in stocks of products | Reductions in product stocks |
| Release of provisions | Extraordinary expenses |
| among other things. | among other things. |
Whilst the direct method is certainly much more transparent and detailed, it is very time-consuming without software, as you have to record all actual items. The calculation is based on specific income and expenditure.
| Direct cash flow = | Cash income – Cash expenditure |
|---|
Among other things, the following income and expenses of companies are regarded as cash-generating:
| Income recognised in the income statement (inflows) | Cash-outflow expenses (payments) |
|---|---|
| Borrowing | Investments |
| Contribution of equity capital | Withdrawal from equity |
| Customer payments | Staff costs |
| Divestments | Rent |
| Other payments received | Repayment of loans |
| among other things. | among other things. |
Cash flow planning enables companies to develop and implement measures to ensure they maintain sufficient liquidity in the future. This involves a number of different tasks. Companies must forecast future income, draw up a spending plan and implement a receivables management system.
This enables them to draw up cash flow forecasts, predict potential developments, run simulations and keep a close eye on liquidity at all times. As this is not a one-off task but a recurring one, it is worth introducing a reporting system and regularly running through various scenarios.
Tip: Compare your forecasts with actual cash flow on a regular basis – this will enable you to identify discrepancies at an early stage and take corrective action.
A stable cash flow is no accident – with the right measures, you can actively improve it:
By implementing these measures, you will lay the foundations for sound liquidity, strengthen your company’s financial health and gain greater certainty for your planning and decision-making.
In practice, cash flow management can quickly become a challenge – as calculations, reporting and forecasting take up a great deal of a company’s time and tie up valuable resources. The solution? Get support from a suitable cash flow management system that is specifically tailored to the needs of businesses.
Software eliminates the need for manual work. Instead of entering income and expenditure into Excel spreadsheets yourself, the system automates the recording, management and calculation of these figures. It retrieves the necessary data from your systems and processes it accurately – from cash flow forecasts to budget planning.
This saves time and takes the pressure off your team: staff within the company can focus on their core tasks, whilst you can access up-to-date, real-time data at any time. This enables you to produce reliable forecasts and make informed decisions – without spending hours preparing data.
And best of all: many tools present the results in a graphical and easy-to-understand format – for example, in clear dashboards or charts.
There are many specialised cash flow management tools on the market that track income and expenditure, plan liquidity or generate reports. Alternatively, however, companies can also make use of an existing ERP system – thereby linking cash flow management directly to other business processes.
The advantage is that you don’t need separate systems for each department; instead, everything is managed in a single centralised system – from warehousing through to sales and finance.
It is important that the software offers at least the following functions:
Why buy separate software for each area when there’s an easier way? With an ERP system such as collana diva now Companies can centrally manage their cash flow, stock levels, processes and reports – all with just a few clicks.
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