Each customer pays in a different way, and different invoices have varying dollar amounts. As a result, all payments are not made at the same time. Therefore, manually tracking varied consumer payment trends is difficult.
Adding customer-specific variables manually using a spreadsheet is likely impossible and challenging at the same time.
Manually tracking market changes such as raw material price variations, interest rate changes, and commodity rate fluctuations is difficult and error-prone which leads to inaccurate cash forecasts.
To get started with short-term follow these three steps:
To determine the best effective cash forecasting approach and tools, first assess your company’s size, mission, performance, and budget. Every company begins with short-term forecasting in order to maintain track of their daily cash flows on a regular basis. Direct cash forecasting allows for more granular analysis and insight.
Frequent forecasting will assist in understanding various market movements such as raw material price variations, interest rate changes, and commodity rate fluctuations, as well as providing the clearest, most up-to-date image of short-term cash balances and prospective liquidity requirements.
The fallout from the outbreak of COVID-19 has created a new, previously unimagined worst-case scenario for the majority of businesses. Stress testing under various assumptions helps companies to have a constant eye on worst-case scenarios.
Late payments have a negative impact on companies, AI can assist Identify high-risk customers by analyzing consumer payment terms and credit scores using customer historical data which helps to prevent liquidity shortage.
A/R is one of the toughest forecasting categories especially for the short-term to overcome this roadblock AI cash flow forecasting solution uses 30+ customer-specific variables to predict accurate payment dates of companies accounts receivable.
Treasurers can assess various scenarios, market fluctuations and determine their influence on the company’s cash flows by changing cash forecasting. This makes it easier to take proactive action after making a decision.
Real-time data allows for confident borrowing, investing, mergers and acquisitions, and working capital decisions. Automation enables treasurers to make better financial decisions by providing accurate insights into cash requirements.
AI cash forecasting tool enables a complete feedback loop model that analyzes historical and current performance and adjusts estimates to improve cash forecast accuracy by up to 95%.
Risk management is simplified with AI-based scenario planning, which involves making tiny adjustments to data in a spreadsheet.
Drill down into forecast variances across all cash flow categories, regional, and company levels to spot, report and fix the reasons for the variations and validate the accuracy of the current forecast.
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.