Four Essentials of Digital Cash Forecasting Software | Cash Flow Forecasting Software | Emagia

Four Essentials of Digital Cash Forecasting Software | Cash Flow Forecasting Software

Learn more: https://www.emagia.com/products/cash-flow-forecasting-software/
Download datasheet: https://www.emagia.com/resources/datasheets/cash-flow-forecasting/

Agenda
Introduction
Cash Forecasting Overview
The Essentials of Digital Cash Forecasting
Customer Success Story
Conclusion
Your Questions
Introduction
Accurate cash forecasting is a prerequisite for excellence in cash management and for optimizing short term borrowing/investing.

The optimal cash forecasting capability must be tailored to the individual company

As with most business processes, the accuracy and efficiency of cash forecasts can be greatly improved using digital technologies such as machine learning and artificial intelligence (AI)

Cash Forecasting Overview
Identify the components of cash flow
Disbursements: payroll, payables, open PO’s, lease commitments, capital investments, debt reduction
Receipts: from AR, royalties, financing

Determine where the data resides

Select a Forecasting Tool
ERP or “bolt on”

Measure the accuracy, refine & improve

Cash forecasting is extremely time consuming if performed manually.

Receipts from trade receivables is usually the largest recurring inflow and the most difficult element to forecast

Digital tools improve accuracy, accelerate compilation of the forecast and reduce effort so forecasts can be run as frequently as needed

Cash collection targets for all Collectors combined with a financial incentive for achievement can also increase accuracy as target setting improves over time

Our focus today will be on short term forecasting cash receipts from AR.

The Essentials of Digital Cash Forecasting
Consolidation – across divisions and ERP’s

Predictive Modeling

Analysis and Simulation

Tracking and Monitoring

Consolidation of all AR data:
Interfaces with all division ERP’s – web & Excel interfaces
Total Global view

Predictive Modeling for Short Term Rolling forecasts:
Uses Predictive Analytics to produce multi-dimensional forecasts of AR collections at company, region, customer or collector level
“Ideal” – collections per payment terms (no delinquency)
Predictive Payment Behavior – per historical Average Days to Pay with machine learning analytics
Collector forecast based on Promises to Pay (PTP)
Excludes disputes, credits, unapplied cash

Multiple ways to forecast cash receipts

Analysis & Simulation:
Drill up and drill down capability (to individual invoice level)
“What If” scenarios
Real time rolling forecast windows
Advanced statistics with machine learning

Tracking & Monitoring:
Variance analysis: forecast vs actual
Comparison to budgets and goals
Scorecards & dashboards

Tracking Actual vs Forecast is the Path to Improved Accuracy

Conclusion
In the current economy, a company needs to monitor its short & medium term cash position closely.

An accurate and efficient Cash Forecasting capability is urgently required. Efficiency and speed is critical as the forecast may need to be updated frequently without diverting effort from driving cash flow to predicting it.

Digital Cash Forecasting can enable a firm to meet the Cash Planning & Management challenges posed by this economy.

Emagia MasterClass 1: Driving Exponential Efficiency in Cash Application with AI
https://bit.ly/3jk5Ys9

Emagia MasterClass 2: 3 Reasons for B2B Digital Credit Amidst Covid and Beyond
https://bit.ly/3dPWung

Emagia MasterClass 3: Integrated Order-to-Cash (OTC) Transformation for Global Shared Service Organizations
https://bit.ly/35u3BON

Emagia MasterClass 4: High Touch to Hi-Tech: The Journey to Touchless Collections
https://bit.ly/31vaONa

Emagia MasterClass 5: Four Essentials Of Digital Cash Forecasting
https://www.emagia.com/masterclass/#four-essentials-of-digital-cash-forecasting

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