In a modern Treasury, cash forecasting should be easy, automated, and accurate. In the end, it is all about understanding better the future of your group’s most precious asset: cash. Failing to predict the future cash position and liquidity requirements can put your entire business to jeopardy. On the other hand, excelling at forecasting will bring your organization several operational and strategic benefits. Modern cash forecasting is a powerful tool for any corporate Treasurer or Cash Manager aiming to make the most out of the group’s liquidity. After all, predictable cash is so much more enjoyable to manage.
Many corporate Treasurers are in the dark when it comes to their organizations’ current liquidity position and especially their future cash requirements.
It is not at all rare that Treasury and Finance professionals make decisions and act on forecasts that are simply poor and incomplete. For example, in a McKinsey survey, half of the Treasurers surveyed admitted that their cash forecasting was less than 80 percent accurate.
The inaccuracy of forecasts can be caused by:
The best way to achieve a well-oiled cash forecasting process is with automation. The groundwork starts with the process.
Take the following steps to achieve cash visibility and forecasting excellence:
The Lumene Group has witnessed a growing global demand for their cosmetics products. In the expanding business, automated liquidity management and forecasting play an important role.
Moelven wanted to reduce extra liquidity in its six cash pools and improve liquidity control and cash flow forecasting. They succeeded with Liquidity Management.