Even though the benefits of long-term management of cash are clear, the practical factors of managing long-term value and performance are well misunderstood. Plenty of evidence reveals that companies create more value for investors when executives drive decisions and investments by keeping long-term business objectives in mind. Managing the interests of all stakeholders in the company also directs to more profitable long-term performance.
Executives who prefer to prioritize long-term value over short-term orientation must take the responsibility of reorienting their companies toward long-term values. For that, it is most important to understand what management actions relieve successful long-term companies from their difficulties, and what efforts CEOs bring in to facilitate and support long-term management. Mckinsey surveyed more than 500 executives to identify the links between management behaviors and long-term business arrangements and they concluded that:
Research shows that behavior concentrated on short-term benefits has increased in recent years. A survey conducted for the executives shows they continuously get pressurized by the shareholders and directors to fulfill their targets at the cost of procedures developed for the long term. According to the managers, their CEOs would turn capital and other resources away from strategic initiatives to meet short-term financial goals. Executives may continue to focus on short-term orientation because long-term management can be challenging due to:
To achieve a winning position, companies can fill this gap by:
Long-term forecasting includes a time frame of six months to five years that gives CEOs an overview of a company’s financial demands and the future availability of investible excess. Even in major corporations, treasury teams are normally small and overloaded. By automating a time-consuming portion of their daily routine, they can devote more time to strategic work that adds value to the company.
AI-enabled cash forecasting helps CEOs with long-term planning by:
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.