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ARTICLES

Getting Granular: A Tool to dig deeper and Improve Cash Forecasts

03-02-2021 | Cashforce | treasuryXL |

Covid-19 shook the foundations of Cash Flow forecasting and Working Capital Management for companies facing uncertainty about revenues, vendor payments, appropriate inventory levels and adequate cash reserves.

At a recent NeuGroup virtual interactive session, one participant impressed others by describing how a Fintech solution provided by Cashforce a year earlier allowed his company to dig into the weeds of business operations, examining line-item details of cash flows to prepare for and absorb shocks to liquidity.
That ability helped treasury provide real value to the company when the internal spotlight landed on the team during the pandemic.

Digging into details: Cashforce opened a window to a more accurate cash picture by revealing what was going on across the business and how various moving ‘levers’ were rapidly changing, the treasurer said.

The technology tracked the granular details of cash flows and highlighted respective drivers that helped identify areas of business behaving normally and those under greater stress from delays in customer receipts.
The resulting insights facilitate setting baseline expectations and seeing potential roadblocks so that treasury teams can have productive conversations with operations teams about changes, new products, etc. so that business intelligence is layered into forecasts appropriately.

The velocity and veracity of data. Covid-19 has called more attention to the need for banking APIs and the harmonization of data feeds into a single analytical source. Real-time mandates are now the norm: Everyone wants payment information in real time, with consolidated cash positions at the press of a button. This greater level of urgency has driven the need for cash flow forensics and analytics.

82% of participants polled have accelerated plans to automate and digitize treasury operations since the pandemic (see chart above for details).
Cashforce stressed that all processes surrounding cash flow and working capital optimization must be revisited to accomplish real-time goals. Across companies, they are seeing an emergence of a cash culture away from the heavy focus solely on earnings.

This shift requires links to AI models so treasury practitioners can determine cash flow drivers not easily spotted by the human eye because they are in the weeds of massive amounts of data.

The data is there; why can’t we get to it? Simply put by one member: Most treasury management systems (TMSs) are not designed to house the magnitude of transaction-level data nor provide the analytic capabilities needed for transparent cash forecasting and best-in-breed working capital analytics.

For example, not all TMSs are able to take in various data streams or extrapolate trends to build cash flow patterns into a cash forecast. For companies with multiple ERPs, the complexity and volume of data becomes exponentially difficult to manage and impossible to analyze manually.
Algorithms designed to roll up your sleeves for you and dig into transaction-level detail to predict trends and flag anomalies provide a structure for cash optimization and a safeguard for deviations that threaten liquidity.
Measure KPIs to move the needle. Automated calculations and daily reporting on key indicators through Cashforce tools allow for expedited metrics that enable smart decision making and facilitate improving working capital through analytics.

Wedded bliss: Marrying short-term direct to long-term indirect cash forecasts! Treasury and FP&A forecast disconnects are common sources of reconciliation tension across companies.

Cashforce uses a “rules engine” that takes ERP data to transform the indirect P&L components into direct cash flow drivers and calculate timing parameters based on historical trends.
One member inquired about the possibility of forecasting by purchase order and was pleased to hear that once the purchase order details were transferred into the system, algorithms calculate cash amounts and timing for both “open ended or closed” purchase orders, taking the headache out of what is often a guessing game.

The Case for a Global Payment Hub

02-02-2021 | treasuryXL | Kyriba |

Global corporate payments technology is changing at a rapid pace. So rapidly, in fact, that internal IT-managed platforms are not able to keep up and the challenges that ensue are left for the IT team to sort out.

These challenges include:

Insufficient Controls
It is up to IT to protect assets from digitized fraud capabilities that are able to penetrate the standard four-eye principal and, in order to do so, IT will need to enhance controls.
Custom Banking Formats
Each bank has its own specific requirements that, even within the same bank, may differ depending on payment type and bank branch location. The number of custom formats needed can make it difficult for IT to meet all global banking format customization requirements.
Infrastructure Costs
The cost of building and maintaining payment connectivity infrastructure, especially given the customization requirements, can easily exceed what a company anticipated.
Delayed Project
Established bank connections will need to be rebuilt as ERPs migrate to the cloud, which can greatly delay the project. And, rebuilding the connection is often made more difficult as employees leave and retire, taking with them the tribal knowledge of how the original architecture was deployed.

Let’s evaluate some of these in the context of the return on investment (ROI) your organisation would achieve by deploying a connectivity as a service global payment hub.

Enhancing Controls

The most common vulnerabilities to fraud include technical, process and simple human mistakes – and, worst case scenario, internal collusion. All of these become significantly more vulnerable when corporations rely on internally built systems and processes that depend on human control workflows with multiple checkpoints.

Today’s fraudsters are more sophisticated, able to easily penetrate corporate infrastructure and pass internal human dependent control workflows. They utilize social networks to penetrate organisations with phishing schemes that include email, as well as deep fake voice simulation software via phone that can sound exactly like your CFO or CEO requesting payment execution.

The best payment hub solution will aid the human dependent controls with machine learning technology, bringing to their attention anomalies that they must further investigate. The solution must be able to keep up with technical assets at the fraudster’s disposal – for example, based on history alerts related to banking change and volume as well as OFAC exception. Payment hubs with machine learning capabilities have demonstrated the ability to reduce corporate fraud exposure by at least 70%.

Payment Connectivity Complexities

Global banking format customization requirements are extremely complex with very limited, if any, corporate tribal knowledge related to the technical architecture and deployment. Each bank has their own specific requirements. In many cases, there may even be differences of formats within the same bank depending on branch locations. The cost of building and maintaining payment connectivity infrastructure given the customization requirements can be in the millions of dollars.

Payment hubs eliminate this cost in several ways:

IT no longer has to manage bank connectivity with outsourced development and maintenance of bank payment formats to the hub solution. Developing this internally can take up to 9 months for each bank at a cost of up to $150K+ per bank, not including any ERP consultant fees. A payment hub solution will be able to deploy connectivity within weeks and provide 24/7/365 maintenance and support at a fraction of the cost.
Multiple systems that previously sent payments to banks can be consolidated down to one. IT will only have to manage one format which is to the payment hub.
Treasury can optimise banking services and remove duplication caused by the multitude of systems (including treasury and ERPs) that connected to the banks. This will standardise and enhance controls and auditability of internal workflows.

ERP Cloud Transformation

If you are considering an ERP cloud transformation or are in the process of the transition, all of the bank connectivity that is established in the current environment will have to be re-built. Given the considerations highlighted earlier tied to the complexities, re-building all of the connections internally will be costly and risk go-live.

Connectivity as a service with the right payment hub will de-risk and accelerate cloud transformation projects. In fact, payment hub solutions provide a more than 80% improvement in time-to-value related to payment go live. This return on investment is inclusive of internal man-hour efforts, external consultant fee elimination, as well as the speed of bank on boarding timelines from up to 9 months to only a few weeks.

In conclusion, payment hubs enhance controls and keep up with the ever-changing fraud environment, eliminate any risk tied to business continuity due to internal infrastructure or tribal knowledge, and finally enable a successful ERP cloud transformation deployment eliminating any risk to internal timelines or objectives.

Treasury Management during the COVID 19-crisis: Opportunities & Risks – Live Webinar

| 1-2-2021 | François de Witte | treasuryXL |

As a result of the COVID19, many companies are faced with cash & liquidity problems. How do you deal with this? What tools do you have available to manage this? How do you approach the stakeholders, including the banks for additional loans. Find out in upcoming event with the help of our Expert François de Witte. Continues in Dutch…

Deze opleiding heeft als doelstelling om inzicht te geven in:

de tools voor het cash & liquidity management en hoe ze te gebruiken;
hoe je bijkomende financiële ademruimte creëert: beheer van werkkapitaal – uitstel van kosten;
hoe je de banken benadert voor uitstel van aflossingen en/of bijkomende kredieten;
de inschatting van de risico’s en opportuniteiten van deze nieuwe situatie;
het opstellen van een concreet actieplan.

Doelgroep

De opleiding kan gevolgd worden door verschillende doelgroepen:

KMO relatiegelastigden van banken;
Financiëel verantwoordelijken van KMO’s en non profit organisaties;
Corporate Treasurers.

Vereiste voorkennis

Advanced level: biedt praktijkgerichte toepassingen op de reeds verworven theoretische kennis van de “basic level” opleidingen (uitdieping).

Programma

Inleiding: Belang van cash & liquidity management

Deel 1: Tools voor het beheer van cash & liquidity management van je onderneming:

Wat is mijn cash positie vandaag?
Cash forecast voor de komende dagen, of zelfs weken?
Beheer van werkkapitaal
Cash Burn Rate – Cash runway
Dagelijkse stuurgroep Cash Positie
Beheer van financiële risico’s

Deel 2: Tips voor het verbeteren van je cash positie:

Beheer van de klantenpost
Beheer van de voorraden
Beheer van je leveranciers
Uitstel van bepaalde uitgaven

Deel 3: Onderhandeling van uitstel vervaldagen of nieuwe kredieten bij de banken:

Kredietbeoordeling door banken: aandachtspunten
Wat is momenteel voorzien door de overheid, Febelfin en de bank community?
Hoe benadert je best de banken: tips en tricks voor je kredietdossier

Deel 4: Risico’s en opportuniteiten – Actieplan:

Risico’s en opportuniteiten
Tips & Tricks
Actieplan

Q & A – Coaching

Praktische Informatie

Datum: 01-03-2021
Tijd: 10u – 12u30
Duurtijd: 2u30 (met pauze tussenin)
Plaats: inloggen op online platform
Extra info: Via het online leerplatform kan u doorklikken naar de webinar. U vindt alle informatie onder de categorie ‘mijn planning’.

Verder hoeft u niets te downloaden. Om de webinar te kunnen volgen, heeft u nodig: een computer, een internetverbinding en de mogelijkheid om geluid af te spelen. U krijgt via uw scherm de lesgever en de presentatie te zien. U heeft ook de mogelijkheid om gedurende de hele webinar vragen te stellen.

Methodologie

Type opleiding: Webinar (korte online opleiding)

Opleidingsmateriaal:

PowerPoint presentatie

Totale Prijs

Leden: € 160
Niet-leden: € 180
Partner BZB: € 160
Incompany: op maat, prijzen op aanvraag