Companies are forced to reimagine and reinvent themselves faster than ever before as exponential technologies such as artificial intelligence, machine learning, and automation become widespread. To truly benefit from the finance digital transformation, the CFO must harness the impact of technology. In an increasingly crowded and competitive marketplace, digital transformation helps businesses in the following ways:
However, reimagining an organization is impossible without investing in new technologies. According to the PwC US Pulse Survey – CFO, August 19, 2021, 68% of CFOs are investing in digital transformation over the next 12 months, through technologies like cloud and analytics. In the digital age, treasury needs to stay competitive and fulfill shifting market demands by ensuring that the right people are involved in implementing emerging treasury technologies.
Process transformation includes:
All firms going through a finance digital transformation should be aware of the new prospects for domain change that come with the use of new technology.
A thorough and collaborative effort can greatly assist in shifting the culture to comprehend, accept, and promote digital transformation.
The need for a more flexible, secure, and scalable IT infrastructure was evidently recognized during the pandemic, which expedited the digital timeframe for treasury solutions. The corporate treasury functions are now evolving for effective working capital management and supporting the company’s long-term goals. Treasurers must equip themselves to better deal with the digital era as the role and underlying expectations of corporate treasury departments evolve.
Benefits of finance digital transformation within treasury
Some of the benefits of digital transformation are:
Cash flow forecasting processes
Cash flow forecasting has always been a top priority for treasurers.
Traditionally, cash forecasting follows the following steps:
However, this method of cash flow forecasting has a lot of repercussions such as:
Maintaining a treasury solution with a digitized financial automation system is very important to create accurate cash forecasts and move forward with your digital transformation journey. HighRadius’ cash forecasting automation software helps the treasury department in the following ways:
1. Increased forecast accuracy: The scope of human errors is reduced because data is gathered directly from data sources. To improve the accuracy of the sales forecast, customer-specific characteristics and external elements such as raw material price variations are collected. Furthermore, the AI-based software enables a closed feedback loop model that evaluates past and current results and adjusts estimates to improve cash forecast accuracy up to 95%.
2. Improved variance analysis: The drill-down and dashboard tools provide a more granular view of financial flows. Treasurers can then examine the differences between forecasts and actuals for various currencies, cash flow categories, geographies, and time periods. Moreover, accurate variance analysis helps to improve the accuracy of cash forecasts by identifying the variance drivers.
3. Accurate scenario analysis: Treasurers can assess multiple scenarios and understand their influence on the business’ cash flows by making adjustments while cash forecasting. This aids in the proactive implementation of decisions. Furthermore, the system supports frequent cash flow forecasting to make decisions timely.
4. Informed decision-making: Treasurers may implement data-driven decisions for managing capital, risks, and enhancing corporate treasury management on time with automated reporting, and continuous data access.
Schedule a demo with HighRadius today if you are looking for convenient and effective treasury solutions that not only meet your company’s needs but also move your company toward the digital transformation journey.
The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.