
Treasury requires insights into the organization’s account transactions to produce an accurate and real-time cash flow forecast. This can be difficult for complex businesses where subsidiaries may have local accounts that aren’t linked to the center, possibly due to a previous merger or acquisition.
To have granular cash flow visibility, it’s critical to get the rest of the company on board with the forecasting initiative.
Despite the fact that CFOs and treasurers are increasingly focusing on cash forecasting, the vast majority of organizations still rely on spreadsheets for their forecasts instead of automation.
The forecasts generated through spreadsheets are inaccurate and unreliable which leads to the following impacts:
According to a Global Treasurer survey, treasury teams spend almost 5,000 hours per year on spreadsheets, with 792 hours spent on preparing cash flow estimates. Treasury can use automated cash forecasting to free up 792 hours to focus on strategic decision-making.
Apart from time-saving, here are some reasons why automated cash forecasting is better than manual cash forecasting:
Companies suffer financial losses when a crisis arises. Accurate cash forecasting is required to avoid catastrophic implications on liquidity. Since the treasury is in charge of all company’s cash flows, teams must react quickly and proactively to avoid the repercussions of an economic crisis.
The following are ways treasury can respond to a crisis with an AI forecasting software:
By developing global treasury solutions, controlling cash flows, managing bank relationships, and managing risks, the treasury department’s ultimate purpose is to ensure that there is enough liquidity for managing the company’s day-to-day operations. During difficult times, their focus shifts to managing working capital, but most organizations continue to conduct treasury operations in the same way.
Automation and AI-based technology add value to treasury in the following ways:
Talk to an expert today to learn how to make the best use of AI and automation to transition from manual to strategic tasks.
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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.