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I See Cash In Your Future

Treasuries come to regard long-term cash flow forecasts as worth the effort

By Richard Gamble | Updated on March 01, 2005

At Greensboro, N.C.-based Syngenta Crop Protection Inc., there was no tradition of cash flow forecasting. Syngenta was a small subsidiary of pharmaceutical giant Novartis AG until 2000, when the manufacturer of fertilizers, pesticides and herbicides was spun off with its parent, Syngenta Corp. Now, however, its value to its parent is in the cash it generates and not so much its growth potential, and you’d better believe that perfecting cash flow forecasting jumped to the head of its finance priorities. “Back [with Novartis], we were a small fish in a big pond,” concedes Bert McCuiston, head of credit, receivables and cash management. “Now, we’re a third of the global business of a $6.5 billion company, and how well we forecast matters a lot.”

For Syngenta, thanks to the very long cash conversion cycle of its 5,000 farming customers, the cash forecasts with the most relevance for planning are long-term forecasts, and the unit now produces four-week, four-month and one-year forecasts. Like many companies with smaller treasury operations, Syngenta turned to software and consultants for help.

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