An investment that pays off
The value of having good cash management and liquidity forecasting solutions in place has never been as important and appreciated as it is today. Never before have the eyes of the CFO and CEO been more focused on the cash flow and cash balance than they are now.
All companies are worried about their cash levels and cash burn rate. We see this clearly now with the crisis of the big US car companies, which have dominated front page news for several weeks. Fortunately, not all companies are in the same dire situation as the big US auto makers, but this doesn’t reduce their interest in the subject of cash flow forecasting.
However, generating good and accurate cash flow forecasts doesn’t just happen overnight. It requires a good and established process and sound system support. If you have only just started thinking about how to conduct thorough cash flow forecasting it is not realistic to be able to deliver correct forecasts to the CFO and CEO, and at the same time it will require lots of work with manual processes and Excel spreadsheets.
Companies that have already invested in superior cash management and cash flow forecasting solutions now fully reap the benefits.
Now is the best time to show how treasury adds value to the company and how investments in good processes and good systems pay off. Without reliable cash flow forecasting it will be very difficult to steer the company through the credit crisis.
If it wasn’t possible to get the budget for investments in high quality cash flow forecasting in the past, now should be the time to ask for it. If any project should be approved in 2009 it should be for improved cash flow forecasting.
