While data seems like an obvious component of forecasting, it’s different to let it drive the whole process. Adopt a data-driven method, and you’ll find that the data can actually do most of the projection work for you.
Data-driven cash flow forecasting uses organization data you already have to project future cash flow. This method will reduce manual effort, so you can focus on analysis. And, in turn, it will transform how you forecast and manage cash flow.
For instance, the head of treasury at a treasury solutions provider noted the largest con to manual cash forecasting processes — time.
“A lot of finance professionals swear by Excel. The time that you put into the output does not match the value of the output,” the head of treasury explains. “It makes sense to spend less time inputting data and more time on analysis. With Excel, you spend a lot of time compiling and consolidating data and checking for errors. The value add comes from understanding the data — not from compiling it.”
So, the company turned to CashAnalytics to support the data-driven cash forecasting services it provides to clients.
“It’s a tool that’s been specifically built for cash flow forecasting that focuses on making the input of information as easy as possible so that you can spend time on the analysis and reporting of the outputs,” the head of treasury says. A lot of companies rely on a [treasury management system] for cash forecasting, but this does not let you get into the details without exporting the data to Excel. By the time someone starts analysing the data, they need to look at forecasting again.”
And they’ve reaped the rewards of adopting data-driven cash forecasting via CashAnalytics for their clients.“The team can now concentrate on analysis,” the head of treasury said.
“The information helps position them as a more strategic partner with their clients and for someone in-house, this would be in the broader business.”