Predictive Cash Forecasting Product Tour

Summary

Predictive Cash Forecasting enables treasurers and cash managers to optimize cash flow management by providing daily, weekly, or monthly rolling forecasts. It supports multiple forecast methods and allows for blending different techniques for each cash line item. With features like predictive planning, cash forecasting by bank, and what-if analysis, users can accurately predict cash positions and take actions to cover shortfalls. The tool automates cash forecasting, making it easier to manage cash flows and ensure optimal cash levels for operations, investments, and financial planning.

Takeaways

• 😀 Predictive Cash Forecasting helps treasurers and cash managers perform both short-term tactical and mid-term operational cash forecasting.
• 😀 The tool generates daily, weekly, or monthly rolling forecasts for operational, financial, and investing cash flow line items.
• 😀 Predictive Cash Forecasting comes with pre-built, best practice content, such as forecast methods and line items, which simplifies setup.
• 😀 Cash managers, controllers, and treasurers can access forecast data at both the headquarters and entity levels.
• 😀 The weekly cash forecast is a key feature, displayed in a 13-week forecast on the Summary Dashboard, enabling cash managers to track cash flow efficiently.
• 😀 The Periodic Cashflows by Week view shows inflows, outflows, cash buffer, and net cash, helping cash managers spot potential shortfalls.
• 😀 When cash balances fall below the buffer, managers are prompted to take action, such as adjusting forecasts or planning for credit financing.
• 😀 Rolling Forecasts allow cash managers to modify cash inflows and outflows forecasts and compare actuals with forecasts.
• 😀 Predictive Cash Forecasting supports various forecasting methods, including historical cash flows and bank balance-based forecasts.
• 😀 Managers can blend multiple forecast methods for each line item and perform 'what-if' analysis to adjust forecasts based on different scenarios.
• 😀 Predictive Cash Forecasting is fully automated, offering daily or periodic forecasts and adjustments to optimize cash management continuously.

Q & A

What is Predictive Cash Forecasting and how does it benefit cash managers?

Predictive Cash Forecasting is a tool that allows cash managers and treasurers to perform short-term and mid-term operational cash forecasting. It helps optimize cash flow by providing daily, weekly, or monthly rolling forecasts for operational, financial, and investment cash flow line items, ultimately ensuring better management of cash resources.

How does Predictive Cash Forecasting help with cash flow management?

Predictive Cash Forecasting helps cash managers by providing detailed, continuous rolling cash forecasts, which allow them to monitor both operating and non-operating cash flow. It also enables the management of daily or periodic cash positions by entity, offering insights into cash balances and forecast adjustments.

What is the significance of the 13-week forecast in Predictive Cash Forecasting?

The 13-week forecast is a key component of the solution, displayed on the Summary Dashboard. It allows Cash Managers to review continuous rolling cash forecasts, check weekly operating and non-operating cash flow, and monitor cash positions, helping to ensure cash balances are maintained above buffer levels.

What action should be taken when cash balances go below the cash buffer?

When cash balances fall below the buffer, cash managers need to take action, such as adjusting forecasts, managing cash inflows and outflows, or planning for short-term credit to cover the shortfall. Predictive Cash Forecasting allows further examination of future weeks to adjust forecasts accordingly.

Can Predictive Cash Forecasting be used to forecast data based on historical cash flows?

Yes, Predictive Cash Forecasting allows for forecasting based on historical cash flows. By using Predictive Planning, cash data can be forecasted with an emphasis on past trends to predict future cash inflows and outflows, improving the accuracy of cash flow management.

How does Predictive Cash Forecasting allow for flexibility in forecasting cash data?

Predictive Cash Forecasting supports multiple forecast methods, allowing cash managers to blend different forecast techniques for each line item. This provides flexibility in forecasting by considering various data points and using different methods for different periods.

What is the role of 'Smart Drivers' in Predictive Cash Forecasting?

Smart Drivers are used in Predictive Cash Forecasting to predict cash flows based on invoice due dates. In the example provided, they are used to forecast the first three weeks for Receivable Invoices, blending this approach with Predictive Planning for subsequent periods, helping to refine forecasts.

How can cash managers review and modify forecasts using Predictive Cash Forecasting?

Cash managers can review and modify forecasts by analyzing actual versus forecasted data on a daily, weekly, or periodic basis. They can adjust the rolling forecast for both cash inflows and outflows, using historical data and predictive models to fine-tune future cash flow projections.

What are the benefits of blending multiple forecast methods for each line item?

Blending multiple forecast methods allows for more accurate and tailored cash flow predictions. By using different techniques for different line items, cash managers can create more reliable forecasts that account for the unique behavior and patterns of each cash flow type, improving overall cash management.

How does Predictive Cash Forecasting support daily cash management?

Predictive Cash Forecasting supports daily cash management by offering fully automated, continuous cash forecasting. This allows cash managers to review and adjust the forecast on a daily basis, even if a company isn't traditionally able to manage cash on such a frequent schedule, enhancing flexibility and responsiveness.