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Perfecting the Cash Forecast

How to Add Business Value to Your Organization

By Bob Stark, Vice President of Strategy, Kyriba | Updated on September 28, 2015
Cash forecasting is an art that is rarely perfected. Every organization talks about forecasting more effectively, but few allocate sufficient people, time, and technology to build an effective program. Understanding the importance of an accurate cash forecast that can confidently be relied upon for key financial decisions is critical to making the right investments in forecasting.

To appreciate the importance of forecasting, it is imperative for CFOs and Treasurers to understand the link between effective cash forecasting and bottom line financial performance. Excuses such as “we’re cash rich” or “interest rates are too low” no longer satisfy hungry investors who demand that cash be deployed or returned to them. Without adequate visibility of forecast cash and where cash needs to be deployed to meet growth targets, CEOs and CFOs risk looking foolish in front of shareholders and analysts.

While there are many reasons to forecast, such as aggressive regulatory demands and volatile finance environments, there are a few key areas that should be especially focused upon to help CFOs and Treasurers further make the connection between accurate cash forecasting and bottom line financial performance.

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