Tag Archive for: treasury

Unlock Your Treasury Expertise Today – Download Our Free eBook!

23-02-2023 | treasuryXL | LinkedIn |

Upgrade Your Treasury Expertise Today! Calling all Treasurers, CFOs, Cash Managers, Controllers, and Finance Addicts! Don’t miss out on the chance to enhance your financial skills and gain a competitive edge in the fast-paced world of finance. Our free eBook, “What is Treasury?”, provides a comprehensive guide to treasury management.

Download the comprehensive eBook on Treasury function, compiled by treasuryXL. This valuable resource covers a wide range of relevant topics including Treasury, Corporate Finance, Cash Management, Risk Management, and Working Capital Management.

Drawing on the expertise of Treasury professionals and their best practices, we have carefully crafted clear and concise articles that provide you with the most crucial information about the key topics in the world of Treasury.

In this eBook, we take a deep dive into each Treasury function and explore:

  • The purpose of each Treasury function, including what it is and why it matters
  • The role of specialists in each function
  • Examples of common activities associated with each function
  • A summary of frequently asked questions and answers
  • A conclusion that ties everything together

Whether you are new to Treasury or an experienced practitioner looking to expand your knowledge, this eBook is an essential resource that will help you stay up-to-date with the latest best practices and insights in the field.

How to receive the eBook ‘What is Treasury’ for Free?

We simply giveaway two presents for you! By signing up for our newsletter you will automatically receive the following in your inbox:

  1. On Fridays, our Coffee Break weekly newsletter will land in your inbox. In this weekly newsletter, we will highlight the whole week full of the latest treasury news within our community.
  2. The 41 pages eBook, What is Treasury?

 

Subscribe, Join, Download and Relax.

Welcome to our community and have fun reading!

 

 

Director, Community & Partners at treasuryXL

 

 

The Best Way to Generate a Return on Cash in 2023

16-02-2023 | treasuryXL | CashAnalytics | LinkedIn |

Aside from boosting free cash flow and increasing cash on hand, good cash management will have a direct impact on your bottom line. With the recent increases in interest rates, the opportunity cost of bad cash management is now much higher and can be measured directly in income and profit.

Banks and other lenders were, as expected, quick to pass on the interest rate increases to their clients. Any company with floating rate debt has already felt the impact. J.P. Morgan guided last week that it was under pressure to increase the prices it pays for deposits as reported record net interest income of $20.3bn in the fourth quarter of 2022, up 48% on the same period last year.

While putting spare cash on deposit and earning interest can help to offset the cost of debt, due to the difference in lending and deposit rates, the best way to earn a return on excess cash in 2023 is to repay debt and reduce interest costs. This is a return that can be directly attributed to your use of excess cash.

Who can generate the highest return?

To generate the highest return and benefit from this type of strategy some form of revolving or easily repayable debt facility will be required. Companies using these types of facilities can pay them down when excess cash is available and draw down when liquidity is needed.

Companies with fixed term debt may not benefit from this type of strategy immediately, however it’s worth considering layering different types of facilities into the mix upon refinance or maturity of current debt facilities. For example, carving out a portion of a fixed facility as a revolving cash facility or an overdraft would afford the flexibility to use excess cash to reduce interest costs.

Debt minimisation as a strategy

The process of using cash to keep debt levels minimised, on an ongoing basis, needs to be wrapped in a clear strategy. This can’t be a sporadic or one-off activity as the business will never gain the full benefit of “investing” cash in debt minimisation and it may in fact introduce unnecessary cash and liquidity risk.

A strategy should be put in place with the clear objective of using cash flow to boost profitability by reducing interest costs while ensuring the liquidity needs of the business are safeguarded.

Steps to putting this strategy into action

As with any strategy, it needs to be tailored to the specific needs of the business however the following steps should be taken by any company looking to put it in place.

1. Gain executive buy-in and support

As the Treasurer, controller, or cash manager, implementing and managing a strategy like this will require time and effort. It will likely become a priority within your role and team. Therefore, it’s something that will require the sponsorship of executives, all the way up to the CFO and CEO, and the buy-in of other key stakeholders in the process. This will ensure it gets both the support and investment it needs to succeed.

2. Robust cash flow forecast

A robust cash flow forecast that provides clear visibility over future cash flows, needs and requirements across your business is an essential part of any debt minimisation strategy. With the visibility provided by a reliable forecast you will be able to make the necessary drawdown and repayment decisions with confidence.

The specifics of the forecast and the level of detail required will depend on the business, however, a forecast extending to at least 13 weeks will be needed to effectively manage this new process. A 13-week forecast is the right duration to manage short term cash and debt management decisions while providing the mid-term visibility needed to understand what’s quickly coming down the tracks.

If you don’t have a cash forecast in place, check out our guides on both setting one up and building the business case to make improvements.

3. Daily cash monitoring

In this new environment, where every dollar of spare cash is put to good use, it’s important to monitor cash flowing across bank accounts and available cash balances daily.

This doesn’t have to be a detailed analysis or a bank reconciliation, however, understanding what’s happening with cash flow day-to-day in the business, notably how much cash is on hand at any stage, is critical to planning short to medium term liquidity.

4. Regular reviews and reforecasts

This isn’t a set and forget strategy. Regular reviews of forecasts and regular reforecasts will allow you to understand how expectations are playing. This allows you to take account of new information which impacts assumptions and ultimately your view of your future cash needs.

A key part of the reforecasting is variance analysis which will allow you to understand the accuracy of previous forecasts and make the necessary adjustments to futures ones.

Reviews should also include the stakeholders in the process. Where people within the business, such as controllers in subsidiaries, feed into to the forecast, they should be engaged on a regular basis to both review and discuss their cash flow plans.

A driver of significant long-term value

It might be tempting to sit on a cash pile, earning little or no direct return, to safeguard against future surprises but businesses who ensure that their cash flow is always working have been proven to drive significant long-term value for their shareholders and owners.

The incremental value of always using cash efficiently, in this case to reduce debt and interest costs, not only drives enhanced returns but also builds muscle discipline within the business that which helps it better manage the inevitable future shocks and unforeseen events.

5 Reasons to Automate your Cash Forecasting in 2023

01-02-2023 | treasuryXL | CashAnalytics | LinkedIn |

If you and your team are grinding the gears on a monster cash flow model and are considering moving to an automated solution, here are five reasons to make the switch in early 2023.

By Conor Deegan

1. Better manage the uncertain economic climate

Perhaps the biggest benefit of cash forecasting automation is that it will allow you to better predict and manage future surprises. The triple whammy of slower growth, high inflation and rising interest rates has led to considerable uncertainty that will last for the majority of 2023 and beyond. Layer in the inevitable unknowns and you have an environment where a firm handle on cash flow is critically important.

Automation will give you the cash flow data you need to manage the road ahead in a streamlined and reliable manner.

2. Manage an increased focus on cash

As a result of the changing economic environment and the expected impact on the cash flow of many businesses, you and your team will likely receive a lot more requests for cash flow reporting and insights into cash flow, including forecasts, from your senior stakeholders as they too focus more on cash flow.

Automated cash forecasting and reporting will allow you to respond faster and more efficiently to these new demands while reducing the admin burden on your team significantly.

3. Repay expensive debt faster

Banks have quickly passed on the recent interest rate increases by the US Federal Reserve and other central banks around the world to their corporate customers in the form of higher loan interest rates. As deposit rates have yet to see the same increase, there is a need for any company with revolving or short-term debt to use excess cash flow to keep debt levels at a minimum. If they don’t, they will suffer the pincer movement of higher borrowing costs and the reduced value of cash holdings which will have a major impact on the profitability of the business.

Optimising cash and debt levels, with the goal of reducing interest costs while ensuring the business has enough liquidity to function day-to-day, requires a tight handle on cash and robust visibility over current and future cash flow. Without a high level of cash forecasting and reporting automation, you won’t have access to reliable detailed cash flow visibility you need to make these debt repayment decisions with confidence.

4. Keep your team happy

The reality is no one wants to spend most of their time manually slogging away with spreadsheets daily. Cash flow spreadsheets can be some of the largest and most complex managed by any finance team due to the number of inputs and volume of data required to create meaningful cash flow forecasts.

While economic conditions have deteriorated, the labour market also remains very tight. Retention of staff remains a top priority for CFOs who understand the upfront cost and ongoing investment needed to make new hires productive and keep them happy. Investing in automation is a great way to show your team that you are committed to both innovation and helping them to do their job, the best way they can.

5. Focus on strategic priorities

In line with the above point, automation of manual cash reporting and forecasting will allow you to focus on more strategic objectives such as supporting the growth of your business and planning longer term capital requirements.

It’s impossible to properly focus on strategic issues when you’re weighed down by the grind of manual work. If you or your team spend 80% of time on manual spreadsheet-based cash flow reporting and forecasting tasks and only 20% on analysis and strategic planning, you can flip this on its head with an automated forecasting solution to instead spend most of your time on higher value tasks.

Summary of Automation Benefits

In summary, cash forecasting automation will allow you to:

  1. Produce cash flow forecasts, reporting and analytics much faster
  2. Produce more accurate forecasts that improve over time
  3. Carry out detailed drill down and analysis
  4. Reduce manual error, improving overall forecast quality
  5. Save time to focus on forward looking planning

The net result of automation is that you will produce a higher quality forecast, in a fraction of the time which will give you clearer and more reliable visibility over future cash flow.

Ready to make the change?

Here in CashAnalytics we specialise in helping companies transition from manual, time consuming spread sheet-based cash reporting and forecasting processes to a highly automated system-based approach. We are experts in cash forecasting and cash management and write extensively on the subject. The follow resources may help you as you consider next steps.

How to convince your CFO to invest in better cash forecasting and visibility?

07-12-2022 | treasuryXL | CashAnalytics | LinkedIn |

If you are responsible for cash flow forecasting and cash reporting in your company and interested in replacing your manual spreadsheet model with an automated software solution such as CashAnalytics, you’ll first need to build a business case to bring to your CFO.



Despite building a solid business case, it’s likely you’ll have to answer further questions and manage objections. This is normal and should be expected but luckily most of these objections fall into several easy to address categories and we’ve dealt with them all before.

The most common objections and how to deal with them are outlined here.

Again, we’ve seen all these objections before. If you want to chat through them or discuss how CashAnalytics can help you replace your cash flow spreadsheet monster, feel free to reach out.

Data-driven Cash Forecasting Guide

06-12-2022 | treasuryXL | CashAnalytics | LinkedIn |

A data-driven approach will transform the way you forecast and manage cash flow. “All You Need to Know About Data-Driven Cash Forecasting to Get Started” takes a deep dive into what data-driven cash forecasts are, what data sources they pull from, which forecasting techniques there are to choose from, and more.

Data Driven Cash Forecasting

Use this guide to start…

Gaining data-backed cash flow insights

Get the most relevant and recent cash forecasts that your business depends on.

Making the most of your organization’s data

Use your company’s data to its fullest potential to get the cash flow answers you need.

Cutting back on manual forecasting processes

Stop spending hours on spreadsheets and leverage cash forecasting automation tools for fast and accurate forecasting.

 

 

Building the business case for better cash flow forecasting

05-12-2022 | treasuryXL | CashAnalytics | LinkedIn |

Do you struggle with a 20+ tab cash management spreadsheet while also struggling to convince anyone that it needs to be replaced?

Building the business case for better cash flow forecasting

This is common. Cash flow forecasting and cash flow reporting typically grows in spreadsheets as a business grows. Tabs are added as the business expands and new reporting requirements emerge. It’s usually the bane of one or two people’s lives but the true problem with managing cash in a spreadsheet runs far deeper than that.

The challenge faced by people managing the cash flow spreadsheet is convincing others that a change is needed. The economic events of the last few months have presented a good platform to now drive this change.

The cost of bad cash management is increasing on a daily basis and the risks of heading into a tough economic climate without a robust and reliable handle on cash flow have never been higher.

For those looking to remove themselves from under the spreadsheet monster while saving their company money and protecting it in an uncertain climate, we’ve put together a comprehensive guide to help you build a solid business case to make an investment better cash forecasting and visibility.

Building the business case for better cash flow forecasting

The guide covers the following areas:

  1. Defining why cash flow visibility and forecasting is important to the business
  2. Outlining the pain and problems with current process
  3. Highlighting the risks and costs of the current process
  4. Aligning with strategic goals and initiatives
  5. Proposing chosen solution
  6. Calculating the return on investment

Brush up on your treasury knowledge? Get our eBook: What is Treasury?

27-10-2022 | treasuryXL | LinkedIn |

How can you fast brush up on your treasury expertise, Treasurers, CFOs, Cash Managers, Controllers, and other Finance Addicts? Or how would you describe “What Treasury is” to family and friends? Well, there is an easy solution for it. Download our free eBook here: What is Treasury?

This eBook compiled by treasury describers all aspects of the treasury function. This comprehensive book covers relevant topics such as Treasury, Corporate Finance, Cash Management, Risk Management, Working Capital Management.

This eBook was prepared by treasuryXL based on the most useful best practices offered by Treasury professionals throughout the previous years. We compiled the most crucial information for you and wrote clear, concise articles about the key topics in the World of Treasury.

We took a deeper dive into each of the above-mentioned treasury functions and highlight:

  • The purpose of each named Treasury function (What is?)
  • What specialists do
  • Examples of Activities
  • Summary of Frequently Asked Questions and answers
  • Conclusion

How to receive the eBook ‘What is Treasury’ for Free?

We simply giveaway two presents for you! By signing up for our newsletter you will automatically receive the following in your inbox:

  1. On Fridays, our Coffee Break weekly newsletter will land in your inbox. In this weekly newsletter, we will highlight the whole week full of the latest treasury news within our community.
  2. The 41 pages eBook, What is Treasury?

 

Subscribe, Join, Download and Relax.

Welcome to our community and have fun reading!

 

 

Director, Community & Partners at treasuryXL

 

 

13-Week Cash Flow Forecast Setup Guide

04-10-2022 | treasuryXL | CashAnalytics | LinkedIn |

13 weeks is the most popular cash forecasting time horizon because it strikes a solid balance between accuracy and range. A good 13-week forecast is accurate enough to strengthen decision-making while offering enough range to support medium-term planning.

13 week cash flow guide

Increase visibility into your working capital with a 13-week cash flow forecast.

Short-term reports don’t give you the big picture — and long-term reports don’t give you the timely insights you need. To efficiently manage your cash flow, you need analytic reports that are fast to compile and easy to read 13-week cash flow reports help you manage your short-term and mid-term cash management, providing you with the timely information you need to make decisions about your business.

 

13-week cash flows:

  • Are required by banks for loans
  • Are often requested by private equity firms
  • Facilitate short- and mid-term cash management
  • Provide data not covered by other reporting processes
  • Hit a sweet spot between accuracy and range

Use our 13-week cash flow guide to start building your forecasting best practices.



Quickly refresh your treasury knowledge? Download our eBook: What is Treasury?

08-09-2022 | treasuryXL | LinkedIn |

Hello Treasurers, CFO’s, Cash Managers, Controllers and other Finance addicts, how do you quickly refresh your treasury knowledge? Or how do you explain ‘What Treasury is’ to family and friends? Well, there is a simple solution for it. Download our eBook: What is Treasury? 

This eBook compiled by treasury describers all aspects of the treasury function. This comprehensive book covers relevant topics such as Treasury, Corporate Finance, Cash Management, Risk Management, Working Capital Management.

This eBook was prepared by treasuryXL based on the most useful best practices offered by Treasury professionals throughout the previous years. We compiled the most crucial information for you and wrote clear, concise articles about the key topics in the World of Treasury.

We took a deeper dive into each of the above-mentioned treasury functions and highlight:

  • The purpose of each named Treasury function (What is?)
  • What specialists do
  • Examples of Activities
  • Summary of Frequently Asked Questions and answers
  • Conclusion

How to receive the eBook ‘What is Treasury’ for Free?

We simply giveaway two presents for you! By signing up for our newsletter you will automatically receive the following in your inbox:

  1. On Fridays, our Coffee Break weekly newsletter will land in your inbox. In this weekly newsletter, we will highlight the whole week full of the latest treasury news within our community.
  2. The 41 pages eBook, What is Treasury?

 

Subscribe, Join, Download and Relax.

Welcome to our community and have fun reading!

 

 

Director, Community & Partners at treasuryXL

 

 

 

 

What is a Cash Conversion Cycle?

24-08-2022 | treasuryXL | CashAnalytics | LinkedIn |

Did you know that on treasuryXL you can find information on all relevant treasury topics? One of the concepts you can find information on is the Cash Conversion Cycle.  A business’s cash conversion cycle (CCC) is a measurement of how much time it takes to turn a cash investment in the business into a cash return in the form of sales. CashAnalytics can tell you all about how to calculate your CCC, what makes a good/bad CCC and how to shorten your CCC.

Original source



Find out:

  • How to Calculate Your Cash Conversion Cycle

  • What Is a Good Cash Conversion Cycle?

  • How to Shorten Your Cash Conversion Cycle (Sustainably)

  • Sustainable CCC Improvements Require Reliable Real-Time Data


Read what Cash Conversion Cycle is all about