Forecasting accounts receivable presents a number of challenges for the following reasons:
Factors causing unpredictability in forecasting accounts receivable:
The challenges associated with forecasting receivables using manually reduce forecast accuracy, which makes taking informed financial decisions cumbersome. Furthermore, erroneous estimates reduce the company’s credibility both within and outside of the organization. Hence, choosing the best process and tools for accurately predicting future A/R cash flows is critical.
Repercussions of inaccuracy in accounts receivable forecasting
Some tips to help improve A/R cash flow forecasting are:
Moreover, analytics helps find important patterns in financial data which is gathered from a variety of sources, both recent and historical, to create a picture of current outcomes and future projections. The results of analytics are derived from intensive mathematical modeling and computations using:
These technologies help comprehend cash flow patterns and make accurate cash flow forecasts.
Spreadsheet-based cash flow projections can only provide two-dimensional tabular reports on current period data from a single source. Whereas, AI cash forecasting gives a 360° view into present, historic, and future data, helping treasurers make confident business decisions. Here is how Artificial Intelligence helps treasurers improve the cash flow forecasting process:
Key benefits of using AI in forecasting accounts receivable
Schedule a demo to use AI cash forecasting software for increasing A/R forecasting accuracy up to 95%.
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.