“With interest rates where they were for the last 20 years, everyone forgot how to cash forecast,” according to a senior Citi treasurer in its Top Treasury Priorities of 2024 report published in February.
When the cost of external finance was close to zero, there seemed little need to obsess over internal movements of money.
But the treasurer’s statement does not tell the whole story.
The global pandemic had already set the scene for a cash forecasting renaissance before rates rose. Lockdowns, supply-chain disruptions, and sudden shifts in consumer behaviour and in cash inflow wreaked havoc on financial projections. The ability to accurately forecast cash, and to know in real time exactly where it sat, became a matter of survival.
More than half the market is working towards [adopting the latest data formats and getting their independent analytics], and a small proportion at the top are already there
"Many small companies died overnight," recalls the treasurer of a leading utility company based in Hong Kong, "and we faced a significant disruption in our cash flow due to the inability to collect monthly fees from these clients."
And since then, the need radically to improve cash-flow forecasting and management has only grown more urgent.
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