The treasurer’s responsibilities have changed over the years. Traditionally the focus for treasurers has been on maintaining liquidity, but the role is evolving steadily. They have started emphasizing capital structure and risk management. Treasurers today need to be strategic advisors. Artificial Intelligence can help them in achieving that goal.
But how to proceed and pick the best-fit AI solution that perfectly fits one’s treasury landscape?
It is important to first identify the cash forecasting purpose by identifying whether the firm is cash surplus or cash deficit.
For instance, cash surplus companies don’t typically need a high degree of accuracy, whereas a company that is cash deficit might need high accuracy and forecast more frequently to make proper daily investment and borrowing decisions.
Analyze if the system can gather and consolidate data automatically from internal systems, and perform variance analysis over multiple time horizons.
AI is capable of performing end-to-end forecasts and build accuracy by reducing variance with time and allows tweaking updates whenever necessary. This is how AI automates cash forecasting:
Analyze if the solution is capable of integrating with multiple systems like ERPs, bank portals, FP&A system, TMS seamlessly. A single source of truth that builds bottom-up forecasts and provides an auto roll-up of local forecasts at the country or entity level into global forecasts enriches visibility and transparency. AI is able to integrate with multiple systems easily and help to achieve granular visibility.
Here is a pictorial representation of how AI readily integrates with different systems.
Evaluate the system in terms of its flexibility and check if it’s future-proof or not.
Artificial Intelligence predicts complex categories such as A/R and A/P with significant variance and allows the use of appropriate models for the relevant cash flow categories. It integrates with multiple systems and provides automatic and frequent upgrades, and evolves the forecasts with time to achieve high accuracy.
Carefully estimate the ROI turnover from the solution. ROI is estimated by using the formula:
Net savings = Gross savings – OPEX – CAPEX
As a part of the gross savings component, automation helps in generating time and cost savings by lowering:
The time saved can be spent on value-added tasks for firms such as driving informed decisions across day-to-day treasury operations.
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.