{"id":9527,"date":"2023-04-06T06:24:42","date_gmt":"2023-04-06T10:24:42","guid":{"rendered":"https:\/\/www.sage.com\/en-ca\/blog\/?p=9527"},"modified":"2026-01-15T11:35:03","modified_gmt":"2026-01-15T16:35:03","slug":"manage-both-cash-in-and-out-to-steer-through-the-recession-for-saas-startups","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ca\/blog\/manage-both-cash-in-and-out-to-steer-through-the-recession-for-saas-startups\/","title":{"rendered":"Manage both cash in and out to steer through the recession for SaaS startups"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tManage both cash in and out to steer through the recession for SaaS startups\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t

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\n\t\t\t\n\t\t\t\tDavid Appel\t\t\t\tDavid Appel<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n

Do you know the best way to manage cash in and cash out for SaaS companies during a recession? It\u2019s an especially important question for newly-hired CFOs to consider.<\/p>\n\n\n\n

Most firms realize the need for financial clarity if they\u2019re going to survive the sluggish market conditions that have recently prevailed in the software space.<\/p>\n\n\n\n

This article will help you get a better understanding of cash flow for SaaS startups, and how to manage your firm\u2019s finances in inhospitable markets.<\/p>\n\n\n\n

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Free cash flow forecast template<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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<\/p>\n

Gain cash flow clarity with our free forecast template.<\/p>\n

<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"woman\t\t\t<\/div>\n<\/div>\n\n\n\n

What is cash flow and what is a cash flow statement?<\/h2>\n\n\n\n

In a nutshell, cash flow<\/a> is the movement of money in and out of your company. Most of the time, it takes the form of cash, although liquid cash equivalents may be included in some cases. <\/p>\n\n\n\n

Cash flow is among the strongest indicators of a company\u2019s financial health. Optimizing and predicting it with the help of automation is a central task for today\u2019s accounting teams.<\/p>\n\n\n\n

An equally important counterpart to your cash flow is your cash flow statement.<\/p>\n\n\n\n

A financial statement gives a snapshot of a company\u2019s cash position. It shows how much cash migrates in and out of a company, and where it\u2019s going and coming from. Financial statements cover the operational, investment, and financing aspects of a company\u2019s relationship to its capital. <\/p>\n\n\n\n

However, there\u2019s one caveat: Negative cash flow might signal a serious problem for business owners, but not always. Sometimes it\u2019s the short-term result of expansion activities, hiring waves, or M&A. <\/p>\n\n\n\n

Understanding cash in and cash out<\/h2>\n\n\n\n

Understanding cash in and cash out lays the foundation to fully optimize your business operations. But before you can improve your company\u2019s finances, you need to understand them deeply. <\/p>\n\n\n\n

Automated accounting software offers a level of visibility, efficiency, and control over cash flow that was previously unheard of. With the press of a button, finance teams can access critical cash metrics such as: <\/p>\n\n\n\n

Forecast variance: <\/strong>Forecast variance is the difference between financial forecasts and financial reality. It\u2019s essential to minimize this figure, which is expressed as a percentage or the equivalent number. <\/p>\n\n\n\n

DSO: <\/strong>Days sales outstanding (DSO) reflects the gap between when a sale is made and when you receive payment on that sale. Automation can help you bring your DSO as low as possible.<\/p>\n\n\n\n

Free cash flow: <\/strong>Free cash flow is what you have left after paying for your business\u2019s capital and operational liabilities. It\u2019s called \u201cfree\u201d cash flow because it is free of obligations and available for use. <\/p>\n\n\n\n

In addition to understanding cash flow itself, you\u2019ll need to grasp how a recession impacts it, and know some strategies you can use to maximize your firm\u2019s resources.<\/p>\n\n\n\n

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Free cash flow forecast template<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Gain cash flow clarity with our free forecast template.<\/p>\n

<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"woman\t\t\t<\/div>\n<\/div>\n\n\n\n

Do cash flow priorities change in a recession?<\/h2>\n\n\n\n

Cash flow priorities in a recession are slightly different than during bullish market conditions. <\/p>\n\n\n\n

In particular, you\u2019ll want to prioritize two main objectives: <\/p>\n\n\n\n

1: Axe or scale back what\u2019s failing: <\/strong>Whether it\u2019s underperforming sales staff or poorly received products, harsh market conditions call for total honesty about what\u2019s subpar. <\/p>\n\n\n\n

2: Improve and build on what\u2019s working: <\/strong>Once you\u2019ve identified your poor performers, you can focus on your star players. That might mean using automated forecasts to make hiring expansions or trying to penetrate a promising market\u2013as long as you can justify your decisions with data.<\/p>\n\n\n\n

A recession is also a great time to reevaluate how a company tracks and improves its cash flow. If your business has been lagging in adopting automation, there\u2019s no better time. It\u2019s the single most effective way to manage cash in and cash out.<\/p>\n\n\n\n

How to manage cash flow in business<\/h2>\n\n\n\n

Companies should adhere to some standard best practices for how they relate to cash in and cash out. In particular, as a newly hired CFO, you should:<\/p>\n\n\n\n

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  • Know your sources to forecast your results: <\/strong>Make sure you have the ability to understand cash flow from three main sources: new subscriptions, renewed current subscriptions, and likely renewed future subscriptions. You shouldn\u2019t be flying blind on any of these three. <\/li>\n<\/ul>\n\n\n\n
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    • Get your cash in and cash out processes squared away: <\/strong>Cloud-based accounting software enables you to continuously and automatically update and close your books with each new transaction. The monthly close cycle doesn\u2019t need to be a reality for modern accounting teams. <\/li>\n<\/ul>\n\n\n\n

      Remember, when it comes to cash flow, your accounting processes after bringing in revenue are just as crucial as your methods for sourcing that revenue in the first place.<\/p>\n\n\n\n

      Why automation streamlines cash in and cash out<\/h2>\n\n\n\n

      Cash flow is one of the central realities of any business and should be optimized in every possible way. <\/p>\n\n\n\n

      From role-based dashboards for SaaS finance leaders to in-depth revenue recognition assistance, Sage Intacct helps companies understand cash in and cash out at a granular level of detail. <\/p>\n\n\n\n

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      Free cash flow forecast template<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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      <\/p>\n

      Gain cash flow clarity with our free forecast template.<\/p>\n

      <\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"woman\t\t\t<\/div>\n<\/div>\n\n\n

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      Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

      Has the recession impacted your cash flow? We\u2019ll help you track and forecast cash in and cash out.<\/p>\n","protected":false},"author":1433,"featured_media":9556,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"footnotes":""},"categories":[7],"tags":[266,258,171],"business_type":[99],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[54],"coauthors":[314],"class_list":["post-9527","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-business-finances","tag-cloud-financial-management","tag-cloud-technology","business_type-medium-business"],"sage_meta":{"region":"en-ca","author_name":"David Appel","featured_image":"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2023\/04\/GettyImages-666002114-708x708-1.jpg","imagine_tags":{"54":"Medium Businesses"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Canada English","distributor_original_site_url":"https:\/\/www.sage.com\/en-ca\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/9527","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/users\/1433"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/comments?post=9527"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/9527\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media\/9556"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media?parent=9527"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/categories?post=9527"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/tags?post=9527"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/business_type?post=9527"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/lilypad?post=9527"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/context?post=9527"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/industry?post=9527"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/persona?post=9527"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/imagine_tag?post=9527"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/coauthors?post=9527"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}