Treasury Management Internation Logo
Published  2 MIN READ
Please note: this article is over 8 years old. If you feel this article is inaccurate or contains errors get in touch here. Many thanks, TMI

From Manual to Automatic: Achieving More Accurate Cash Forecasting

by Stephan Benkendorf, Executive Board, Hanse Orga AG

Achieving more visibility, control and efficiency are key drivers in today’s business environment. This also applies to the cash and liquidity management processes. Understanding where your cash is, is a first crucial step to drive down dependency on external credits, identify potential cash shortfalls, and put your working capital to work.

Within many organisations it is still very common to use spreadsheets for collecting and passing on cash management information. This process is obviously more error prone, non-automated and can only be done with limited frequencies, due to the amount of time required. While much investment in ERP systems has been done, the cash management automation is lacking.

Only as good as the data

The greater the scale of operations and the complexity of corporate structure the more visible the limitations of spreadsheets become in day-to-day cash management and liquidity planning. Cash management teams spent many manual activities on the Excel-based forecasting process. Despite its flexibility the cash management information is not updated in real time, not even near real time. When, for example, commodity prices suddenly change the cash flow forecasts need to be adapted. In the case of spreadsheets this needs to be done manually. Hence, the data generated from spreadsheets is far from being reliable or quickly available.