Treasury usually focuses on liquidity planning and forecasting and releasing trapped working capital, making informed decisions on borrowing, investing, and managing financial risks. However, during the pandemic, the focus has shifted towards managing working capital.
Cash surplus companies are monitoring cash very carefully and taking mitigating strategies, whereas cash deficit companies are striving to maintain liquidity, extend credit lines, and collect A/R faster.
Treasurers focus on four key areas of cash forecasting which include:
1. Forecast Accuracy
2. Decision Making
3. Variance Analysis
4. Scenario Analysis
These four subprocesses become highly challenging and difficult to handle when there is no technology in place. Here are some of the challenges they face with the subprocesses due to the lack of technology:
Treasurer makes reactive decisions due to ground-level assumptions instead of taking proactive decisions to plan for the future. A newer approach can be taken with proper and scalable technology to improve accuracy and planning.
To not fall behind, the first thing that treasurers should focus on is:
Digital adoption: Initially, technologies used to be adopted by larger companies due to high upfront costs. But, with new technologies emerging, even the small and mid-sized companies have started adopting them to automate the tasks that don’t necessarily require human involvement or are very labor-intensive, so that their staffs can emphasize more on high priority tasks.
With treasurers working from home, the cyber risks have prevailed significantly, so treasurers must take preventive measures to control cyber frauds and data breaches and mitigate them with stringent actions. Being a techie has become crucial at times like these for treasurers to stay on top of the curve.
With technology, the treasurer makes decisions based on an accurate and aerial view and becomes a high-value employee.
The modern treasurer needs to have the following skills in the age of AI:
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