GTreasury Launches New Connectivity Suite for Treasurers

12-07-2022 | treasuryXL | GTreasury | LinkedIn |

 

Workflow Brings in Third-Party Banking, Payments, and Financial Data

ClearConnect ensures the fidelity of data essential to treasurers and CFOs

CHICAGO, Ill. – July 12, 2022 – GTreasury, a treasury and risk management platform provider, today announced the launch of ClearConnect. Featuring more than 80 API calls in a dozen key categories, ClearConnect offers the most robust connectivity suite available to treasury teams and the office of the CFO. The solution provides immediate access to the comprehensive data required for confident and actionable treasury insights, and ensures the fidelity and security of that data through purpose-built connections bolstered by GTreasury’s support.

While “API” is becoming a buzzword often associated with data connectivity solutions, the terms are not synonymous. API connections are only as powerful as the underlying workflows that support them. Activating an out-of-the-box API is not an instant panacea for an organization’s data needs. Without the right underlying workflows, APIs not attuned to a business’s specific requirements will drop or fail to capture all the data sets necessary to power effective analytics and data lakes. Given the complexity of treasury and risk management, those missing insights can result in significant consequences for treasury teams and CFOs.

ClearConnect provides both the powerful underlying workflows and the multifaceted purpose-built API-enabled connectivity to ensure that data capture is consistently done correctly and thoroughly—providing all the analytics an organization needs from a particular connection. The solution creates certainty, security, and seamless connections by integrating all data from business systems and financial institutions, and is capable of combining connection types for uniquely complete data sets and data fidelity.

Specifically, ClearConnect creates value for treasury teams and the office of the CFO by delivering:

  • Secure connectivity across the financial value chain
  • Extensions to corporate treasury workflows
  • Access to specialist solutions within the integrated platform
  • Lower bank fee costs through seamless connectivity
  • Access to multiple innovative FinTech products and services

ClearConnect’s market-leading API catalog features over 80 API calls, augmented by host-to-host connectivity wherever needed to bolster capabilities. The solution enables robust functionality across a dozen categories, including payment approval rules, payment workflows, payments and templates, balances and transactions, general ledgers, deal management, bank accounts, bank account management, legal entities, forecasts, operators, and data extracts. ClearConnect’s flexible connectivity architecture uses best-in-class API-enabled connections to ensure fidelity and continuity of customers’ most vital data. Connectivity into Swift, Fides, and others provides a single source of truth and visibility into an organization’s cash and financial risk, and delivers transparent workflows for payments, bank file monitoring, and more.

GTreasury’s always-expanding partnerships with leading global financial institutions and market data partners ensure seamless bank and ERP connectivity, domestic and international transactions, and access to market insights. As client needs change, GTreasury’s active collaborations with product partners further ensure the creation and delivery of modernized products and services, securing ClearConnect’s place as a market-leading solution always aligned with customers’ current data requirements.

From risk management capabilities powered by Moody’s Analytics and KYOS, to market data provided by Refinitiv and Fenics MD, to banking, ERP, investments, and payments partners, ClearConnect now enables customers to wield the full power of the GTreasury ecosystem even more easily and completely.

“ClearConnect doesn’t just offer a significantly greater breadth of connectivity options than anything else available, it also underwrites those capabilities with foundational workflows for data integrity and ease of use,” said Pete Srejovic, Chief Technology Officer at GTreasury. “Investing in API technology only to realize that you are dropping crucial data is a nightmare that has come true for many CFOs and treasury teams. With today’s launch of ClearConnect, we’re proud to offer not only the largest and most powerful API connectivity solution on the market, but one that customers can entrust to deliver absolute data integrity along with the comprehensive and future-proof solutions of the GTreasury ecosystem.”

       

About GTreasury

GTreasury believes there is opportunity in complexity. We connect treasury and finance teams with industry-leading experts, technology solutions and untapped possibility. By simplifying complexity, teams can unleash their organization’s potential to gain strategic advantages and grow. GTreasury helps organizations reach that potential by connecting treasury and digital finance operations through a world-class SaaS treasury and risk management platform and integrated ecosystem where cash, debt, investments, and exposures are seamlessly managed within the office of the CFO. GTreasury delivers intelligent insights, while connecting financial value chains and extending workflows to third-party systems, exchanges, portals, and services. Headquartered in Chicago, with locations serving EMEA (London) and APAC (Sydney and Manila), GTreasury’s global community includes more than 800 customers and 30+ industries reaching 160+ countries worldwide. Visit GTreasury.com

Recording Webinar | How successful master data management can help you secure financial processes?

12-07-2022 | treasuryXL | Nomentia | LinkedIn |

Recently, treasuryXL partnered with Nomentia on a live webinar on how successful master data management can help you secure financial processes.

Watch the recording of this session for free now by clicking on the image below!

In this webinar, we discussed how you can manage your Master data in a safe way, how you can prevent fraud and sanction risks through the management of this data, and the subsequent processes that make use of your master data. This ranges from the creation of counterparties in your ERP to the safeguard checks in your payment process and system.

More specifically, we will discussed the following topics:

  • Introduction to Master Data management
  • Managing the counterparty Master Data in your ERP
  • Trends that companies face related to Master Data
  • High-risk processes using your master data
  • Steps to create a safe and secure culture within your company
  • Setting up appropriate processes and systems to enable security

Watch the recording now!

 

 

 

TIS Coffee Talk

11-07-2022 | treasuryXL | TIS | LinkedIn |

Attend TIS’ coffee talk tomorrow with Joerg Wiemer and Nicolas Christiaen to learn more about how their innovative and cloud-based solution is addressing treasury’s contemporary concerns in the areas of forecasting and liquidity management.

Tuesday, July 12th, 4-5PM CEST

Cash Forecasting & Liquidity Management with TIS

 

Speakers: Jörg Wiemer, CSO & Co-Founder of TIS.  Nicolas Christiaen, Founder of Cashforce

Date: Tuesday, July 12th, 10-11am EDT / 4-5pm CEST

Session Outline: Today, cash reporting and forecasting functions are still being performed manually by a significant portion of treasury groups, which represents a major pain point for CFOs and business leaders when attempting to make strategic financial decisions. These manual workflows also limit treasury’s bandwidth to focus on other tasks and impact their ability to effectively manage liquidity and working capital. However, the new suite of capabilities developed by TIS and Cashforce (acquired by TIS in Q2 2022) eliminate many of these inefficiencies and ultimately enable companies to gain quick and accurate insights to their financial position based on reliable payments and liquidity data.

Key Discussion Points: In this session, Jörg and Nicolas will:

  1. Explore the treasury industry’s outstanding need for improved cash forecasting solutions and workflows.
  2. Examine the modern challenges of collecting and aggregating the right data together to conduct forecasts.
  3. Showcase how the accuracy and completeness of this data is paramount to the success of treasury’s overall forecasting strategies.
  4. Highlight how a “data-first” approach to forecasting generally results in more accurate and actionable insights.

To better understand how global liquidity management and cash forecasting workflows are being transformed through TIS’ revolutionary data aggregation, analytics, and advanced AI / ML capabilities, use the below link to register.

We can’t wait for you to join us! 

 

Nicolas Christiaen on TIS’ acquisition of Cashforce

06-07-2022 | treasuryXL | TIS | CashForce | LinkedIn |

Would you like more insights into TIS’s acquisition of CashForce? Hear from Nicolas Christiaen, CEO and founder of Cashforce, as he describes the inherent synergies between the two companies and what may subsequently be accomplished as a result of the acquisition.

Watch the video below to hear from Nicolas

 

 

“Our best-of-breed solutions are very complementary to each other: Being that natural synergy”

 

 

 

Nicolas Christiaen, CEO and founder of Cashforce

 

CFO Perspectives: 3 ways CFOs can use currencies to boost their business’s value

05-07-2022 | treasuryXL | Kantox | LinkedIn |

As a CFO, you are aware of the benefits of FX hedging for treasury. However, are you also aware of the macro-level advantages for your company and its value?

A new CurrencyCast series has just been introduced by Kantox. They examine five ways that efficient currency management may benefit your entire business in the first episode of their CFO Edition miniseries, including how to incorporate it into your strategy and how to decrease cash flow fluctuation. Watch below the video or read the corresponding blog.

Credits: Kantox
Source

In the first edition of CFO Perspectives, we’ll draw from our work with CFOs to explore three ways senior finance executives can make currency management a winning growth and cost-saving strategy for their business.

Looking at the concerns expressed by CFOs in most risk management surveys, a number of familiar themes seem to reoccur: the importance of cash flow forecasting and monitoring, the centrality of FX risk management and the ongoing digitisation of treasury processes

Yet, this picture is far from complete. 

Ultimately, among the tasks assigned to CFOs, there is the need to make a contribution toward enhancing the value of the business. But what is the role —if any— played by currency management in that regard? Answering this question allows us to single out three strategic contributions of currency management that CFOs should prioritise.

Value and FX hedging: time for a reassessment

Does currency management create value? The traditional view has been ambivalent: a ‘glass half full, half empty’ kind of appraisal. While the benefits of hedging FX have never been in dispute, the problem lies with the perceived high costs of currency management.

This is precisely where things are changing—and quite fast. Digital, API-based technology is putting to rest the notion that currency management is always a costly, resource-intensive task. Meanwhile, Multi-Dealer Platforms (MDPs) such as 360T, embedded in these solutions, sharply reduce trading costs.

CFOs: three strategic contributions of currency management

(1) Create opportunities for growth

Feeling concerned about exchange rate risk, managers may neglect the growth opportunities that come from ‘embracing currencies’. Buying and selling in more currencies allow firms to capture FX markups on the selling side while avoiding markups on the contracting side. Two examples will suffice:

(a) On the selling side: In e-commerce setups, currencies can be leveraged to increase direct, high-margin sales on company websites with many payment methods. Multi-currency pricing is the secret weapon for reducing cart abandonment, which still stands at about 77% globally.

(b) On the buying side: Buying in the currency of their suppliers allows firms to (1) Avoid inflated prices charged by suppliers who seek to manage their own FX risk; (2) Widen the range of potential suppliers by putting them in competition; (3) Obtain extended paying terms.

By taking FX risk out of the picture, currency management enables firms to reap these and other margin-boosting benefits of using more currencies in their day-to-day business operations. Ultimately, it is about removing the disincentives that prevent firms from ‘embracing currencies’.

(2) Provide more informative financial statements

Informative financial statements allow investors to assess the quality of management by removing noise from the process. To the extent that the variability in net income is perceived as a measure of management quality, effective currency hedging creates a sense of discipline in the eyes of investors.

The good news for CFOs is that technology is making great strides in cost-effectively managing the accounting-related aspects of currency management. Here are two examples:

  1. Balance sheet hedging. Automated micro-hedging programs for balance sheet items take the impact of FX gains and losses out of the picture, as invoices are hedged with great precision.
  2. Traceability and Hedge Accounting. The perfect end-to-end traceability made possible by automated solutions eases the costly and time-consuming process of compiling the required documentation for Hedge Accounting.

(3) Lower the cost of capital

Companies can reduce cash flow variability thanks to a family of automated hedging programs and combinations of hedging programs, including layered hedging programs that make it possible to maintain steady prices in the face of adverse currency fluctuations.

In challenging times, when the availability of external financing at a reasonable cost is scarce —an all too common occurrence in years of pandemics and wars—reduced cash flow variability makes it possible for companies to execute their business plans and meet all cash commitments.

An impaired capacity to raise financing has implications in terms of valuation, especially for smaller businesses. This ‘cost’ has been variously measured, with some estimations ranging from 20% to 40% of firm value. Currency management enhances the capacity to raise finance and, by extension, lowers the cost of capital and boosts firm valuation.

A wide range of opportunities to create value

We have singled out three major contributions of currency management in terms of creating value for the business: (1) stimulating growth while protecting and enhancing profit margins; (2) lowering the variability of cash flows; (3) presenting more informative financial statements. We can mention even more benefits:

  • Taxation is optimised as smoother earnings reduce the tax burden when higher levels of profits are taxed at a higher rate.
  • Capital efficiency is raised when pricing with the FX rate improves the firm’s competitive position without hurting budgeted profit margins.

While most of these advantages have been known by CFOs for many years, there is a new factor to consider: they can be implemented with Currency Management Automation solutions that remove most of the resource-consuming, repetitive and low-value tasks performed by the finance team, eliminating unnecessary operational risks along the way.

With an added bonus: by leveraging currencies, CFOs have the opportunity to take decisive steps in terms of digitisation. According to a recent HSBC survey, digitisation is seen as the most positive factor by 84% of CFOs overall, as they expect investments in digital technology to have a “positive impact on their business”, with more than half of them expecting it to give the business model “a large boost”.

The time to act is … now!

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Invitation Open Evening: Treasury Management & Corporate Finance | July 5 | Vrije Universiteit Amsterdam

29-06-2022 | treasuryXL |  VU Amsterdam | LinkedIn |

Boost your professional skills, knowledge and expertise in Treasury Management & Corporate Finance thanks to these high-level modules. Complete the programme and be awarded with the title of Registered Treasurer (RT).

The Vrije Universiteit Amsterdam invites you to join the Online Open Evening on Tuesday, 5 July 2022.

Treasury Management & Corporate Finance 19.00 – 20.00 hrs.

Sign up for the Online Open Evening

The postgraduate Executive Treasury Management & Corporate Finance programme combines two finance disciplines which largely overlap and are inextricably connected: Treasury Management and Corporate Finance. For this reason, it is a unique programme both in the Netherlands and abroad. It has now been running for more than 20 years at Vrije Universiteit Amsterdam. This postgraduate programme aims to promote development as an academic professional through a mix of academic theory and case studies of real issues in the field of treasury management and corporate finance.

Upon successful completion of this 18-month programme, you will be awarded with the title of Registered Treasurer (RT), a well-known and widely recognised title within the treasury professionals’ community. Exemptions apply to alumni of Dutch RC and RA programmes.

There are five key benefits of attending this programme

  • Broaden the perspective on the corporate treasury and finance disciplines that all-round corporate treasurers and finance professionals should master
  • Gain and master hands-on knowledge crucial in the daily practice thanks to a balanced mix of academic and professional expertise
  • Career development opportunities in a different setting thanks to the participation in the Thursdays lectures, leading to new ideas, insights and development
  • Interactive sessions are an added value of the programme, which explain and apply the main principles to professional practice through practical examples and business cases
  • Connect with the treasury community and fellow participants and build your own professional network

The programme Treasury Management & Corporate Finance at a glance

  • Start date: September 2022
  • Duration: 1,5 year (part-time)
  • Modules: 6
  • Time Investment: 130 hours per module including 8/9 weeks of four-hour teaching sessions and approximately 10 hours of self-study per week.
  • Tuition fees: € 22,500
  • Lectures:  Thursdays
  • Form: Physical classes (VU Amsterdam follows the advice of the RIVM for public health).

View all admission requirements, costs & practical information

Partners in delivering this programme are Orchard Finance, KPMG, PWC, Zanders and EY.

Best regards,

 

Herbert Rijken
Programme director

Hedge Trackers, a GTreasury Company, Offers Advice to Treasurers Amid Interest Rate Uncertainty

28-06-2022 | treasuryXL | GTreasury | LinkedIn |

With interest rates rising and remaining unpredictable, corporate treasurers need to have a hedging plan in place. For many, this can be easier said than done.

Farah Lotia, the Director of Interest rate and Quantitative Analytics at Hedge Trackers, recently spoke with both Treasury Today and Euromoney Magazine about the purpose of interest rate hedging and how they can use it to their advantage.

Hedge Trackers was recently acquired by GTreasury.

Treasury Management & Corporate Finance | Become an official Register Treasurer

23-06-2022 | treasuryXL |  VU Amsterdam | LinkedIn |

Improve your professional practice by taking a broad, conceptual and professional view on Treasury

The postgraduate programme in Treasury Management & Corporate Finance at the Vrije Universiteit Amsterdam is running now for 25 years. In close contact with the treasury community, the VU keeps the curriculum up-to-date and relevant for professionals. Professional relevance is guaranteed by about 10 core lecturers and 20 guest lecturers from our partners KPMG, Orchard Finance Consultants, PWC, Zanders and by other finance professionals.

About the programme

The programme takes a broad view over Treasury Management and Corporate Finance from the of a non-financial corporate. Most graduates have an MSc and at least 3 years of experience in Treasury. Participants with a bachelor degree and sufficient treasury experience are successful in this programme as well

The programme offers participants an 18-month learning environment that stimulates professional development in 2 ways:

(1) Evolve as an academic professional. The goal is to facilitate the development as an all-round treasury professional. This is done by both building a sufficient knowledge base and training skills to apply general knowledge in specific cases. In addition, participants will be challenged to become experts in their own specific field of interest.

(2) Engage in career development and networking within the Treasury community. Increase your insights and expand your network in your treasury network. The programme may inspire participants to take next steps in their careers.

Along these two main lines of benefits, we are planning to give more information and explanation in two follow-up online sessions/recordings which will be posted on this platform in the coming weeks.

Why should I start with the programme?

The most important takeaway from this post is the fact that the TM&CF programme is NOT a long course acquiring just knowledge. It is much much more than that. Apart from just knowledge the programme puts a lot of attention on creative application of knowledge to your specific business situation. It trains you how to become a professional expert to some areas in the field of Treasury you have chosen. The programme helps you to connect with other members of the treasury community and to build your own professional network by connecting with fellow participants.

The programme provides you a substantial boost in your career, as the qualification is acknowledged in the labour market, and/or game-changer in your professional life as a Treasurer. It is a must-follow for all passionate about treasury. Successful completion of the programme results in the title of Register Treasurer, which is highly valued within the treasury community.

Also read: Why becoming a Register Treasurer is so much more than completing a course! (By Pieter de Kiewit)

Online Information Session | Register Today

On the 5th of July, an online information session on the programme will be given in which we also discuss the potential benefits of this program for Treasury professionals. You can sign up here.

Best regards,

Herbert Rijken
Programme director

Visit the website for more information.

For more info contact @[email protected]

LinkedIn page of the programme

GTreasury Adds Victoria Blake as Chief Product Officer; Ashley Pater Becomes General Manager at Hedge Trackers

21-06-2022 | treasuryXL | GTreasury | LinkedIn |

The product leaders bring veteran experience into their new roles, as GTreasury expands its treasury and risk management solutions and services for treasury teams and the office of the CFO

CHICAGO, Ill. – June 21, 2022 – GTreasury, a treasury and risk management platform provider, today announced that it has named Victoria Blake as GTreasury’s Chief Product Officer, and Ashley Pater as General Manager at Hedge Trackers. Recently acquired by GTreasury, Hedge Trackers is the global leader in accounting, consulting, and software services that protect clients against financial risk.

Victoria Blake joins GTreasury with more than 20 years of experience and success in product leadership roles across several SaaS and technology companies. Blake comes to GTreasury from Zapproved, where she served as the Vice President of Product. During her tenure at the e-discovery software provider, she led high-level strategy development, product definition, and market-facing thought leadership and vision. Before Zapproved, Blake was responsible for defining next-generation cloud services offerings as the Vice President of Product Management at Metal Toad, an AWS Consulting Partner. Blake has also held product management and leadership positions at WebMD Health Services, Jive Software, and Walker Tracker.

As GTreasury’s Chief Product Officer, Blake will lead the company’s global product and UX teams in developing and delivering innovative new solutions for GTreasury’s customers and partners. From modern automated treasury and transaction management to AI-powered SmartPredictions™ cash forecasting and visibility, GTreasury’s SaaS platform empowers treasury teams and the office of the CFO with the future-proof technology and capabilities required to drive confident financial decision-making. GTreasury has also continued to expand its broad ecosystem of connected partner technologies, via API integrations with ERPs, banks, and other external providers where instant data connectivity maximizes customer efficiencies.

“GTreasury has built its reputation as a leading treasury and risk management platform by harnessing innovative cloud, AI, machine learning, and emerging technologies that move our industry forward,” said Victoria Blake, CPO, GTreasury. “Just as importantly, GTreasury has always focused on product usability and ensuring that its powerful tools are always easily accessible and seamlessly connected for the teams that rely on them. I look forward to building on what GTreasury has created over the past three decades, and delivering even more next-generation tools to make CFOs and treasury teams more successful.”

Ashley Pater is now the General Manager of Hedge Trackers after more than a decade of leadership roles within GTreasury. Pater most recently served as GTreasury’s Chief Product Officer, where she was responsible for aligning product vision and strategy to the company’s business objectives. Pater previously held leadership positions in GTreasury’s marketing and account management functions, focusing on building global brand awareness, lead generation, event management, and cross-sell programs.

Pater will oversee daily business operations and lead growth strategy around Hedge Trackers’ FX, interest rate, and commodity price risk management services and consulting. Pater will also ensure alignment and integration opportunities within the broader GTreasury organization. Hedge Trackers offers best-in-class expertise and technical depth in meeting today’s unprecedented demand for effective hedging strategies, identifying exposure, managing risk, and meeting compliance and audit requirements. Under Pater’s leadership, Hedge Trackers will focus on bolstering its risk management expertise and bringing new solutions to market across the company’s risk product suite.

“Combining the strengths of GTreasury and Hedge Trackers makes us the clear market leader when it comes to both our treasury risk management products and our consulting acumen,” said Ashley Pater, General Manager, Hedge Trackers. “Today’s CFOs and financial leaders understand that risk management and hedging capabilities are critical to navigating volatile markets and achieving larger business goals. I’m excited to further our solutions and insight to equip customers with the solutions required for effectively and cost-efficiently managing their risk.”

“Both Victoria and Ashley possess the clarity of vision required to advance our GTreasury and Hedge Trackers products to meet our customers’ evolving needs today and well into the future—and both bring relevant, experienced, and proven leadership to accomplish those goals,” said Renaat Ver Eecke, CEO, GTreasury. “I’m glad to welcome Victoria and Ashley into their new roles and look forward to what’s to come from GTreasury and Hedge Trackers.”

About GTreasury

GTreasury is committed to connecting treasury and digital finance operations by providing a world-class SaaS treasury and risk management system and integrated ecosystem where cash, debt, investments and exposures are seamlessly managed within the office of the CFO. GTreasury delivers intelligent insights, while connecting financial value chains and extending workflows to third-party systems, exchanges, portals and services. Headquartered in Chicago, with locations serving EMEA (London) and APAC (Sydney and Manila), GTreasury’s global community includes more than 800 customers and 30+ industries reaching 160+ countries worldwide. Visit GTreasury.com

Perfecting the Cash Forecast

21-06-2022 | treasuryXL | Kyriba | LinkedIn |

 

By Bob Stark, Global Head of Market Strategy

Source

The number one treasury issue that causes CFOs the most potential concern is unreliable cash visibility and forecasts, according to a Nov. 2018 CFO Publishing survey, “3 Key Areas Where CFOs Say Treasurers Need to be More Strategic.”

Every organization talks about forecasting more effectively, but few allocate sufficient people, time, and technology to build an effective program. Understanding the importance of an accurate cash forecast that can be relied upon for key financial decisions is critical to making the right investments in forecasting. While there are many reasons to forecast, such as protecting against currency volatility, there are a few key areas that should be addressed to help CFOs and treasurers further make the connection between accurate cash forecasting and bottom-line financial performance.

So, what is cash forecasting? Cash forecasting, when performed accurately, enables greater certainty of projected cash balances. Longer term investing, reduced borrowing costs, more effective hedging programs and better mobility of global cash, cash positioning is concerned with today and often the next five business days. The purpose is to manage daily liquidity to ensure shortfalls are covered and surpluses are concentrated to earn some yield on excess cash. 

Cash budgeting is performed by finance teams such as FP&A and is more focused beyond one year – although with increased emphasis on free cash flow guidance, the reconciliation of indirect budget-based forecasts with direct cash flow forecasts is increasingly managed quarterly. 

Cash forecasting typically extends cash positioning with horizons anywhere from one week to one year. Forecasting leverages multiple data sources to increase confidence in the projected cash balances so that better cash decisions can be made. The value of forecasting is based upon the value of those better decisions.

So why forecast? Ineffective cash forecasting costs money and impacts shareholder value. A poorly executed program drives a number of negative consequences so it is critical to understand the link between effective cash forecasting and bottom line financial performance. Excuses such as “we’re cash rich” or “interest rates are too low” no longer satisfy investors who demand that cash be deployed or returned to them. Without adequate visibility of forecast cash and where cash needs to be deployed to meet growth targets, CEOs and CFOs risk looking foolish in front of shareholders and analysts. 

The volatility in global currencies shows no signs of abating, meaning that the pressure on CFOs to maintain the value of foreign cash inflows and outflows persists. Companies can experience earnings per share losses from unexpected and unhedged currency impacts or have difficulty in maintaining (let alone increasing) return on cash in a post-Basel III environment. 

Forecasting cash will allow segregation of operational and non-operational cash into time buckets as well as deliver the needed accuracy to allocate cash to longer duration investment strategies. This will help preserve previously realised investment returns or help to find an alternative for cash balances that are no longer wanted by your bank!

Certainty in projected cash balances drives the CFO’s ability to anticipate and prepare for corporate actions and strategic investments. For example, without confidence in cash forecasts, the CFO and treasurer are not relied upon to contribute to key M&A decisions such as providing guidance on the components of cash, debt and equity to calculate a total acquisition cost.

When cash is held globally, share buybacks or dividend hikes are a challenge. Often CFOs find it cheaper to borrow cash domestically than repatriate funds – yet this analysis requires certainty into projected cash balances. Confidence in the forecast is critical to optimize business value; CFOs need an effective cash forecast in order to make commitments on how to reinvest cash to meet organic growth targets. Lack of confidence will lead to unnecessary borrowing or equity financing.

Consolidation of data – Finding the right information and determining the most efficient (i.e. automated) way to integrate it into a consolidated forecast system is key. 

While automation is important, data quality is also paramount to success. When building the forecast, each line item may be sourced in different ways. The source of the information will determine the best way to build the forecast for each line item. For example, many treasury teams prefer to import accounts payable data directly from the ERP while for receivables information they may wish to extrapolate historical data and model using a linear regression. For treasury teams to be effective, it is important that all methods be fully automated and secure so that initial setup, maintenance, and daily execution to build the forecast are easy and can be maintained by the user (and not require re-programming).

Collaboration – Making decisions on the best data to build the forecast also requires determining who to collaborate with to smoothly access that key information. In many cases, treasury does not have direct authority over the people that own systems and/or business responsibilities that offer that data Yet, treasury relies upon this outside information to build a comprehensive forecast, so good internal communication skills are critical to receiving quality information in a timely way. Accounts Payable, FP&A, IT, Regional Controllers all forecast projections for decentralized organizations. Many treasury teams plan, with their CFOs, a top-down collaboration model that builds effective cash forecasting into the team’s objectives and compensation. This draws attention to the forecasting objectives and motivates each team to fulfill their roles.

Measurement – The most important – and often overlooked – step is the measurement of forecast accuracy. Implementing a process to measure forecast accuracy at a detailed level to identify the source of variances is critical to improving quality and ultimately reducing forecast variances. Equally important is implementing a feedback loop – to systems and to people – that ensure that forecast data is improved based on variances that were identified. The feedback loop is especially important when non-treasury resources are contributing to the forecast to ensure that the right behaviors and cash forecast numbers are positively reinforced while opportunities for improvement are well communicated. This is especially effective when feedback is aligned to KPIs and quarterly objectives of those outside of the treasury team.

Key to success – A forecast variance analysis should be detailed with multiple ‘snapshots’ taken. If only a summary picture is reviewed (e.g. how effective was forecasting over a 3-month period) then a lot of the variability is hidden within that timeframe. Measuring daily, weekly, or bi-weekly will help uncover the ups and downs between forecast and actuals that might otherwise go unnoticed. Fortunately, the business intelligence features of a TMS such as Kyriba offers the data visualization and analytics required to offer this level of detail. Cash forecasting is especially important if you are “cash rich” with a high percentage of non-operational cash deposits. Multinationals with significant foreign revenues must forecast better, so they can hedge effectively and deliver cash predictability to their stakeholders. The key to forecasting is flexibility so that you have many options to model the different streams of forecast data. The accuracy of your data will determine if importing, regressing, extrapolating, or other methods of calculations are needed to build your forecast effectively. 

Without measuring forecast accuracy, it is impossible to know if you are good at forecasting. Data visualization helps focus on important variances – whether by category, time bucket, or geography – and isolate what data needs to be improved for future forecasting. ROI of cash forecasting is very high.

In summary, the value of forecasting is driven by what your organization can do with additional cash. The value of cash can be measured by investing longer with higher returns on cash, repaying debt, earning yield from early supplier payments, or investing in new organizational projects. Perfecting the cash forecast means freeing up cash from working capital and directing towards these higher value uses.

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