Tag Archive for: cash and liquidity

Impressive year for our partner Cashforce

| 28-1-2020 | treasuryXL | Cashforce |

We are very proud at our partner Cashforce. What a year it has been for Cashforce! From opening new offices, to processing millions of transactions, Cashforce successfully round up 2019. More specifically last year, Cashforce:

  • Opened up three new offices in London, Copenhagen and Ghent
  • Moved its HeadQuarters to Antwerp, Belgium
  • Visited over 20 countries during 2019
  • Attended 12 Treasury conferences, gave 9 speaking sessions, hosted 4 Belgian Beer Nights and gave away 2159 Chocolates
  • Processed over 40 million transactions, doubled their clients, hired 14 new FTE’s and collected $5 million of investments by Citi & Inkef
  • Gained 724 followers on social media, consumed 10,498 cups of coffee and held 5 board game nights
  • Won the best use of Artificial Intelligence in Treasury Management reward by Global Finance Magazine 2019 and became 1 of the Top 5 hottest Startups in Belgium
  • Settled new partnerships with Citi, BNP Paribas and KBC
  • Upgraded their Smart Algorithms and further developed Artificial Intelligence

Source

From a P&L to a Cash-driven organization in less than a year after implementing Cashforce

| 7-1-2020 | treasuryXL | Cashforce |

For many multinational corporations, effectively managing their working capital across numerous regions can be a significant challenge. Additionally, optimizing cash streams in a complex data environment can be a time-consuming process. The same issue goes for Dawn Foods, a global B2B bakery ingredient supplier with multiple entities & finance departments. With more than 50 locations worldwide, serving products in 106 countries and 40.000 customers served globally it is one of the main players in the food industry.

Starting 2015 the company started a change management process to turn Dawn Foods into a more cash orientated company.  A taskforce was created supported by Bart Messing, European Treasury Manager and Marc Kersten, European IT director, sponsored by the VP Finance & IT Michael Calfee.

Their key objective was a 10% year-over-year reduction of Net Working Capital Days.

One of the essential building blocks of this plan was implementing a 24/7 working capital tool whereby the KPI’s could be reported into several dimensions that are relevant to the different business units and functions. The different dimensions are important, as the business will only support improvement processes and accept targets unless the KPI’s are measured in relevant dimensions.

After careful comparison based on an extensive survey under key business people between internal/external tools on quality requirements, costs and potential benefits, Cashforce, a ‘next-generation’ cash & working capital analytics solution, came out on top. By designing a proof of concept, in cooperation with the internal IT department, a successful solution was reached. After the implementation the results were already significant in a short time: an instant working capital dashboard that provides 24/7 insights, as well as with simulations in different dimensions that are relevant for each department.

By providing the right technology, in combination with an unmatched cross-departmental cooperation, Dawn Foods was able to build a bridge between its finance department and the rest of the departments, thus reducing complexity and increasing visibility and insights.

This led to millions of dollars saved since setting up the new project (over a three-year period). The cash that was freed up has in the meantime been used to finance a strategic acquisition.

 

 

How to generate an accurate cashflow forecast | 3 key factors

| 10-12-2019 | treasuryXL | Cashforce |

One would imagine that in a world where smart cities and virtual reality are becoming a part of daily reality, treasury and finance departments would have perfected their cash forecasting by now, giving the CFO a level of confidence in the numbers. Surprisingly, that doesn’t appear to be the case at all – both PwC’s & Deloitte’s Global Benchmarking studies highlighted cash and liquidity risk as the most important treasury challenge to manage.

If you look closer, it’s not difficult to see why: try managing and forecasting the cash flows of a complex internal ecosystem of multiple ERP’s, FX exposure and geographic entities, combined with increased global uncertainty, tax changes, interest rate rises, and regulatory change. Still, having an accurate cash flow forecast and understanding the underlying drivers is essential to a company’s well-being, as it can help you foresee potential problems which may arise in the year ahead. A lot of companies around the world are therefore increasing their efforts when it comes to cash flow forecasting, but with variable results and accuracy.

So what sets good cash forecasting (i.e. accurate and efficient forecasting) apart from bad cash forecasting (i.e. not transparent, inaccurate & time-consuming cash forecasting)?

KEY SUCCESS FACTOR #1: BEING ABLE TO DRILL DOWN INTO YOUR ACTUAL CASH FLOW DRIVERS BY USING TRANSACTION-LEVEL / GRANULAR DATA

A lot of Corporate Treasurers are seeking an accurate cash forecast through a delicate combination of well-chosen cash flow drivers & assumptions. But, to what extent do they have a good view of these cash flow drivers? Do they know what is really eating and feeding their cash (more than the typical high-level AR, AP, Treasury flows that your Treasury Management System will consolidate)?

There isn’t a lot of visibility, unfortunately. Why is that? The classic TMS will typically consolidate basic forecasted flows from the different OpCo’s. The problem is that these OpCo’s cash forecasts are already consolidated from the underlying business transactions. This blurs the insight in the real cash flow drivers and gives no assurance whatsoever on the quality of the data.

To build a good forecast, it is important to have clear and error-free access to the underlying business transactions. In a recent PwC study, only 6% of respondents said they made use of the inputs at the transactional level. But thanks to advances in technology, particularly big data analytics, treasurers can have instant access to the details of the underlying cash movements and are given the ability to drill down to the transaction level. In the gif below, you can see what this means in practice.

Suppose you want to know exactly what drives your company’s cash flow in a certain period. The GIF below demonstrates how easy this could be, using the right platform. Via an easy-to-use click-through interface, the user is able to gain insights per month, quarter, week and day including instant access to the transaction level details.

KEY SUCCESS FACTOR # 2: APPLYING THE RIGHT FORECASTING LOGIC IS CRUCIAL FOR A GOOD FORECAST

Cash flow forecasting is often associated with a pile of Excel sheets and manual work. Treasurers are forced to turn to Excel to calculate their forecasts, because classic Treasury Management Systems do not offer the required flexibility.

Getting insights into all your OpCo’s cash flow drivers is one thing but combining all these data sources and applying the right logic/rules to generate a good forecast is another. Let’s take the example of applying vendor payment behavior. Intuitively, it makes sense to enrich invoicing & sales order details with data on when vendors actually pay.  Many companies, however, struggle to take this data into account. In general, they haven’t set up the appropriate algorithms to include in their forecasts. Hence, they face inaccurate forecasts and a lot of time is spent explaining (over and over again) why it was inaccurate.

Defining forecasting logic in a smart way is not an easy challenge. Yet, if your goal is to achieve an accurate forecast, a set of smart logic algorithms is invaluable. Again, modern technology proves to be a great asset. Progressive companies are using technology-driven, smart engines to calculate & automate their cash forecasts, taking over the manually intensive work and proposing logic that could improve the forecast in the future.

Above you can see how a smart engine works in practice. Cash flows are projected into the future (blue line) using forecasting logic. The dotted orange line represents a scenario with one or more of the underlying assumptions changed and immediately shows the impact relative to the blue line.

KEY SUCCESS FACTOR #3: A GOOD FORECAST IS ONE THAT IS USED TO DRIVE ACTION

Even if your forecast is no less than a piece of art, it might be underused, or not used at all. To make a real impact, there should be actions retrieved from the forecast results. There is a lot of potential in accurately predicting what might happen in the future and this potential should be translated into value.

There is even more value in considering multiple scenarios by changing some of the underlying assumptions (e.g. changing the day or frequency of your payment runs). When working in Excel or a TMS, changing assumptions might trigger a lot of additional manual work and is unfortunately often avoided. To get the most out of your forecasting process, it makes sense to build multiple forecasts and assess the impact of each of these scenarios on cash optimization. Driving action combined with building multiple scenarios, can transform finance departments into business partners for fueling a company’s growth.

The orange line reflects a scenario, built by the user. These views give her/him an immediate comparison between the current forecast (full blue line) and a different scenario (based on assumptions made by the user). A powerful simulation engine is able to show the impact of different scenarios in a blink. Imagine the power this can bring to a business-driven finance department.

Mark O’Toole heads up the Americas for Cashforce, a big data analytics & TMS technology provider focused on cash management, forecasting and working capital.

 

Cashforce raises €5 million in series a funding led by INKEF Capital & Citi Ventures

| 18-10-2019 | treasuryXL | Cashforce |

Cashforce, a Fintech leader in Cash forecasting & Working capital management, announced that it has closed € 5 million in Series A funding. The growth financing round was led by INKEF Capital and Citi Ventures. The existing investors Pamica NV, the investment company of Michel Akkermans, and Volta Ventures, are co-investing and reinforcing their commitment to the company.

Since 2018, Cashforce has demonstrated hyper-growth by developing multiple partnerships and by streamlining Cash forecasting processes & Working capital management for enterprise customers globally. New offices have been opened in London, Ghent and Copenhagen in 2019, with others (Zurich, Singapore…) to follow soon.

This funding round will accelerate global growth and presence in new markets.

“With the help of Cashforce’s technology, the way cash flow forecasts are generated and Working capital is managed can be radically transformed. By addressing these deep-seated challenges for many corporates using automation and AI, Cashforce is well-positioned and has tremendous potential to significantly help enterprises,” commented Corné Jansen, Managing Director of INKEF Capital.

”There is an increasing appetite in corporate treasury for integrated decision support tools from their banks for the next investment, fund or hedge action going beyond what their existing systems can provide today. As a prerequisite step to delivering such solutions from Citi, we look forward to collaborating with Cashforce to significantly improve our clients’ ability to aggregate disparate data sets across their enterprise to help better manage their working capital and more accurately predict through algorithmic techniques their potential liquidity exposure. At Citi, we are running a number of experiments collaborating with our clients and fintechs – such as CashForce – empowering our clients’  journey towards Smart Treasury. This journey moves them beyond descriptive analytics to decision support and decision automation, offering the opportunity to realise the promise of full automation of operational treasury,” said Ron Chakravarti, Citi Managing Director, Global Head – Treasury Advisory.

Executive Chairman Michel Akkermans and CEO Nicolas Christiaen stated: “Cash forecasting still remains one of the most important challenges for treasurers worldwide. The last three years have been very fruitful for us, developing our solution and broadening our eco-system through partnerships with global banks, treasury consultants and bank connectivity partners. Our mission remains unchanged: delivering reliable technology that enables financial leaders to make high-caliber decisions. We are therefore very enthusiastic about our new global strategic banking partnership with Citi, jointly offering their corporate clients a crystal-clear future.”

About INKEF Capital

INKEF Capital is an Amsterdam-based venture capital firm that focuses on long-term collaboration and active support of innovative technology companies. INKEF Capital was founded in 2010 by Dutch pension fund ABP and with €500 million under management is one of the largest venture capital funds in the Netherlands. INKEF focuses on investment opportunities in Healthcare, Technology, IT/New Media & FinTech.

About Citi Ventures

Citi Ventures ignites change and reimagines solutions that drive economic progress for clients. Headquartered in Silicon Valley with offices in San Francisco, New York, London and Tel Aviv, Citi Ventures accelerates discovery of new sources of value by exploring, incubating and investing in new ideas, in partnership with Citi colleagues, our clients, and the innovation ecosystem.

About Pamica 

Pamica is the investment company of Michel Akkermans, is a serial entrepreneur in Fintech companies. Amongst others, he was the Chairman and CEO of successful companies such as FICS and Clear2Pay. After the global payment solution company Clear2Pay was acquired by FIS in 2014, he became an active investor and board member in several companies and private equity organizations, as well as a venture partner and Chairman of Volta Ventures.

About Volta Ventures 

Volta Ventures Arkiv invests in young and ambitious internet and software companies in the Benelux. The fund has € 55 million under management and is supported by EIF and PMV.

 

 

Release your Working Capital and Treasury potential

| 26-09-2019 | treasuryXL | Cashforce |

Deriving meaningful information from extremely large volumes of data from multiple sources is time-consuming and inefficient for any finance or treasury function; whether that be to provide financial data or forecasts to the market, banks or internal stakeholders, the challenges are myriad. But the department cannot forecast without that insight.

To compound the problem, in a world where volatility and uncertainty have become the norm, treasurers are now part of their organisation’s strategic leadership and must increasingly find ways of bolstering their approach to gain a much-needed competitive edge.

This article considers three of the most common challenges for finance and treasury departments today, and explores how the Cashforce platform solves them:

  • Harnessing big data
  • Advanced cash flow forecasting
  • Implementing new technology.
HARNESSING BIG DATA: THE BIG PICTURE

Like many other departments within a business, most treasury functions have large volumes of consolidated data in complex spreadsheets, very rarely providing easy access to transactional data. Decision making is difficult as the answers are often buried in complicated formulas and countless links to excel templates. The problems caused by an inability to identify relevant data are compounded by any number of missed opportunities and risks. To put the big data problem into perspective, a report from McKinsey & Company suggests that a typical organisation uses less than 1% of the collected data to make decisions.

“A typical organisation uses less than 1% of the collected data to make decisions”

A major British retailer faced this very challenge — large volumes of data embedded in 10 different ERPs and no consolidated view on what was really tied up in working capital. To unlock the potential that already existed within the retailer’s own data, they asked Cashforce to implement a cloud-based solution with detailed dashboards to drill down from a consolidated position to core data by integrating with ERP systems. Within three weeks, this opened up over 20 million transactions per month, ready for analysis.

Cashforce‘s big data engine accesses vast volumes of data quickly and easily via a library of APIs and connectors which take raw data from multiple sources (including ERPs, Treasury Management Systems, data warehouses and banking platforms) and transforms it into meaningful, easy to understand dashboards — empowering the user with the big picture.

ADVANCED CASH FLOW FORECASTING: ML AND AI FOR INTELLIGENT SIMULATION

If cash is king, then accuracy in cash forecasting is the prodigal son. PwC‘s 2017 and 2019 Global Corporate Treasury Survey shows how forecasting accuracy is key to managing and running a business efficiently, and it continues to be a high ranking C-suite priority. A lack of transparency over data means that output from generic treasury management systems inaccurate and unfocused. To maximise predictive, trend-based behaviour you need access to the raw data. But how?

Far from the futuristic concepts, they were perceived to be, machine learning and artificial intelligence are being deployed right now, with stunning results. Smart algorithms are providing proactive optimisation actions to generate highly accurate forecasts, and intelligent simulation engines enable companies to consider multiple scenarios and measure their impact. Cashforce is unique in that the platform can be set up quickly, even in the most complex environments, seamlessly connecting with any ERP system. As a result, finance departments can be turned into business catalysts for cash generation opportunities throughout the company.

“If cash is king, then accuracy in cash forecasting is the prodigal son”

In the case of education company Pearson, CFO James Kelly was looking to improve the cash forecasting abilities of a TMS that was the equivalent of an Excel spreadsheet.

“If you don’t have predictability, you can end up overriding your forecast and saying ‘nine days out of ten I’m spot on, but there’s the risk that one day out of ten I’ll be miles out’ – so you decide to hold a lot of cash back just in case,” Kelly said.

Pearson partnered with Cashforce to deploy an AI-supported forecasting solution which integrated with the group’s systems, replaced manual keying with robotics, and provided multiple AI algorithms offering unprecedented insights into cash flow. AI-based forecasting unlocked significant amounts of trapped cash overseas, and balances were reduced by over £100 million — freeing up cash to invest elsewhere in the business instead of drawing down on credit facilities.

IMPLEMENTING NEW TECHNOLOGY: A NIMBLE APPROACH TO ONBOARDING

When it comes to the universal challenge of onboarding, the focus must be on simplification and streamlining. Central to this is the alignment of a library of connectors to data sources. This is why Cashforce’s working capital module integrates with multiple ERPs to provide granular detail within operational transactional data.  And because the user organisation may be running different or multiple ERPs in different regions, we recommend an ERP-agnostic solution.

The operational data in an ERP only provides half a story so our solution also sits on top of treasury systems to provide a holistic cash flow forecast combining both treasury and operations with data based on a client’s unique reporting requirements.

End-user flexibility is a key feature of any financial system today, so user roles can be defined and users added or removed by a client administrator.  The additional benefit of a SAAS platform means no heavy lifting is required by your IT department.

“With Cashforce, finance departments can be turned into business catalysts for cash generation”

In the course of a recent implementation, British manufacturer was faced with the challenge of Brexit-related contingency planning, when it decided to stockpile certain FDA-approved products destined for the US market.  The firm’s initial focus was on cash management and forecasting but refocused mid-way on working capital management with a major focus on inventory and traceability. Such a change in scope can often lead to significant delays in delivery, but with Cashforce driving the process, the project was delivered on time.

About Cashforce

Cashforce is a smart cash flow management and cash flow forecasting platform for working capital intensive businesses. Our technology is helping Finance departments save time and money by offering cash visibility & pro-active cash saving insights. CFOs and Finance departments can drill down to the cash flow drivers and smart algorithms are applied providing pro-active optimization actions. An intelligent simulation engine enables companies to consider multiple scenarios and measure their impact.  As a result, finance departments can be turned into business catalysts for cash generation opportunities throughout the company.

Cashforce is unique because it offers full transparency into what exactly drives the cash flow of complex (multinational, multi-bank, multi-currency, complex ERP(s)) enterprises, typically with revenues between € 50 million and € 10 billion.  It is the first cash management platform that builds a bridge between the treasury department and the actual business departments such as sales, logistics and purchasing. Unlike other enterprise software players, the Cashforce platform can be piloted within a few hours in complex environments, seamlessly connecting with any ERP system.

Currently users in over 40 countries are using our platform to streamline their cash management processes. Cashforce has proven its value in various complex environments, including environments where in-house banking, cash pooling, POBO, ROBO, etc. are used.

Cashforce is headquartered in Belgium with an office in New York City, serving customers such as Hyundai, Portucel, Alcadis among many others worldwide.

 

 

The challenges of liquidity planning and forecasting

| 17-06-2019 | treasuryXL | Cashforce |

For more than a decade, liquidity and cash flow forecasting have remained in the top three challenges for CFOs and treasurers globally. This begs the question: why has this been a perennial challenge for so long? The reason: treasury operations today are, for the most part, a series of unintegrated systems, spreadsheets and silos between groups and other departments.

Companies are often faced with multiple ERPs, many entities, and different currencies. These make the task of managing liquidity a major challenge, not to mention a significant manual effort involving many people. The result: lots of time spent gathering and validating data while still not having a full, transparent view into the numbers. The volume, variety, velocity and veracity of data generated each day has made traditional analysis – using spreadsheets, for example – obsolete. It is just not possible to manually aggregate and analyse that much data with sufficient speed to be able to gain insight, and then turn that insight into action. To be able to do so you need the right set of tools.

WHAT SHOULD A TREASURER OR CFO BE ASKING THEMSELVES?

  • Can you identify all your sources of data that you need to make a cash flow forecast? Eg ERP (how many do you have, are they all on the same instance), CRM, bank statements, trend analysis, manual data (such as budgets).
  • How often do you refresh your short-term/mid-term cash forecast? (Daily, weekly, monthly, quarterly, or I don’t make a cash forecast).
  • How do you ensure no mistakes happen in your data capturing/consolidation?
  • How do you incentivise your subsidiaries? Local subsidiaries and users typically download information from their ERP, and upload in other types of files to HQ, or in SharePoint, or they will just send Excel files from all over the globe to HQ, which means it’s 100% manual. There’s no real alignment of the processes across subsidiaries and no audit trail at the local level.

WHAT TO CONSIDER?

  • Companies should ensure their information is system-based. In other words, they have full integration with their ERP, so they don’t have to manually download data (it should flow automatically).
  • Any augmentation of data should have an audit trail so that, ultimately, the group treasurer can see who did what, and when they did it.
  • Automate the process and deploy alert functionality, such as reminders for subsidiaries to post their local forecast, and for the group treasurer to look for it.
  • Ensure bank connectivity to enable comparison of actuals with forecast figures.

I HAVE THE DATA. NOW WHAT?

With this data, treasurers should now be able to answer these four key questions: what happened; why did it happen; what will happen; and what should be done?

  • Descriptive analytics answers the question, “what happened?” This is the most basic form of big data analytics, and provides a picture of past events.
  • Diagnostic analytics, “why did it happen?” Diagnostic analytics enables you to perform root cause analysis and use that information to prevent future repetition of events.
  • Predictive analytics, “what will happen?” Predictive analytics uses advanced algorithms – often with artificial intelligence and machine learning – to forecast future events.
  • Prescriptive analytics, “what should I do?” Prescriptive analytics tells you what the best steps are to achieve a specific result. Prescriptive analytics requires advanced machine learning capabilities.