cash flow forecasting in a multi location organisation
TRANSCRIPT
27th Finanz Symposium
Mannheim, 10th June 2015
Agenda
Cash Forecasting in a Multi-location
Organisation
Agenda
1. About Us 2. Using Technology 3. Analytics
Products
Solutions
Who we work with
Our view of
forecasting
Benefits
Enabler
Preliminary Prep
Type of Data
Operational
Checklist
Position Reporting
Variance Analysis
Performance
Analysis
Working Capital
Reporting
1. Introduction
Conor DeeganFounder & Director
Martin GillespieFounder & Director
Company Information
CashAnalytics is a specialist provider of cash forecasting and liquidity planning solutions.
Founded in 2011 and based in Dublin, Ireland.
The CashAnalytics forecasting solution is used by over 2,000 users in 40 countries. Our customers range from small private equity backed companies to global organisations.
1. Products
CashAnalytics products range from simple fast to deploy forecasting solutions to fully integrated liquidity planning platforms.
Operational Rolling Cash ForecastingCash Flow Mapping EngineIntercompany Matching Bank Connectivity SAP and Oracle Connectors
Real-time ReportingCash Flow AnalyticsWorking Capital AnalyticsData ModellingVariance Analysis Performance Analysis Bank account Reporting
1. Solutions
Solution Details
Fast Deploy Cash Forecasting
- Quickly create a central forecasting model- Roll-out to business units - Easy secure access
Fully Integrated Liquidity Planning
- Combine cash forecasting with advanced integration (bank and ERP)
- Create a single real-time view of cash
Driver Based Modelling - Create custom driver based models- Carry out stress testing and scenario
analysis
SAP and Oracle Plug-ins - Get a view of ERP cash data- Map to forecasting models - Auto-map transactions
1. Who we work with
We work with companies who want to
Gain real time visibility over actual and forecast cash flows
Improve the accuracy of their forecasts
Increase efficiency
Focus on analysis
1. Our view of Cash Forecasting
People Systems Models
+ +
= Best ChanceOf Success
2. Using Technology
• 2008 financial crisis• Board/ CEO/ CFO sponsored• Reduced access to finance
Cash is King
• Finance lags other areas (e.g. sales & marketing)• Fewer decision makers• Real-time a base requirement
Demand for Real-time Analytics
• Operational and working capital• 40% reduction in finance workforce since 2004• 0.96 probability of automation
Relentless Pursuit of Efficiency
More Relevant Than Ever
2. Using Technology
Business Case
1. Automation of manual processes = Greater efficiency
2. Faster reporting time = Better visibility
3. In depth analysis = Greater understanding of cash needs
4. Greater confidence = More informed decisions
2. Success Loop
1. Accurate and reliable data input
2. Full meaningful engagement from
participants
3. Appropriate tools, processes and
support
4. Analysis, performance reviews
and feedback
Enables Success
Hearts and Minds
Systems and Process
2. Using Technology
Getting Ready – Preliminary
1. Prepare a Good Sales Pitch – Don’t assume everyone will
understand why it’s important (Execs and BU’s).
2. Clearly Define End Goal Reporting – What are we trying to
achieve and what do we want to see?
3. Start with Low Complexity – It’s easier to add complexity than
reduce it.
4. Apply the 80:20 Rule to Everything – 20% of your business units,
line items, business lines, currencies will contain 80% of your
flows.
2. Using Technology
3 Types of Data
Actual Cash Flows
Short Term Forecasts
Mid-Long Term Forecasts
2. Using Technology
Build a Data Source Map
For each piece of data used in forecast identify the source.
Short Term (1 – 4 weeks) Mid Term (up to one year)
Payroll
Entity Controllers FP&A M&A SalesExecs
- Planning Models- Business Forecasts
2. Using Technology
Operational Checklist
Forecast duration
Frequency of roll-over
Level of cash flow detail
Time period granularity
Split periods
Additional information
Intercompany
Flexibility
Foreign exchange rates
3. Reporting and Analytics
Goal of Technology is to Provide more Value
Position Reporting
Variance Analysis
Performance
Analysis
Working Capital
3. Position Reporting
Position reporting is a “must have” from a forecasting process. It should show you:
Where cash is right now
Where cash is going to be at defined points in
time
Currency breakdown of cash movements
Breakdown of business unit requirements
All in real-time
99% of time is spent on this
3. Variance Analysis
Actual versus forecast. Learn from what
actually happened.
Forecast versus forecast. Monitor changing
expectations.
See what business units and transactions
are causing most differences.
“Show me what has changed”
3. Variance Analysis
1. Quickly Identify Line Item 2. Drill down to business unit 3. Highlight base transaction detail
3. Performance Analysis
Monitors accuracy over a period of time.
Shows consistently inaccurate areas of
forecast.
Builds a body of proof that allows changes
to be made.
Provides the Basis for Making Changes
3. Performance Analysis
Provides the Basis for Making Changes
3. Working Capital Analysis
How is your Cash Conversion Cycle Impacted?
3. Working Capital Analysis
Can I see what has changed?
Summary
Technology doesn’t provide a silver bullet solution
BUT with proper preparation and planning….
Technology will allow you take your forecasting and liquidity
planning processes to the next level by:
Providing real-time visibility over cash
Allowing you to focus solely on analysis
