The ongoing Covid-19 pandemic has created a host of unprecedented challenges for almost every aspect of the treasury function. Nevertheless, working in conjunction with their bank(s), treasurers can armour their teams against many of the challenges.
Cash forecasting is becoming increasingly important. Before the pandemic struck, many companies had sufficient cash available, forecasting was often done by Excel and there was no great urgency to perfect it. But it is vitally important that firms now begin to work on improving the visibility of their cash. This will involve digital solutions such as forecasting tools driven by artificial intelligence (AI), which some banks are now offering via their online banking platforms, and vendors are investing in heavily.
Unfortunately, there is no quick way of implementing these types of tools – it can take several months, but the starting point is to make sure that your data is available, as comprehensive as possible, and above all, clean. Work towards this end should start immediately.
Turning receivables into cash and feeding liquidity into the system is an additional ongoing challenge. Your bank can help with tried-and-tested solutions here, and can also introduce you to fintech partners where appropriate. Digitisation will prove vital for confirmations, so that you know when a payment has been received. And technology can also assist in automating reconciliations in order to speed up cash application.