Cash Visibility And Analytics: Solutions For C-Suite Evaluations Of Order To Cash Processes
Cash Visibility And Analytics
As the business climate grows increasingly complex, senior executives must be able to track and measure the performance of their financial flows. Cash visibility and analytics are two key components that help create precise picture of the cash position and aid decisions towards improved order to cash processes.
This article aims to discuss the utilities of cash visibility and analytics, particularly as it relates to order to cash processes, from the perspective of C-Suite executives. The ultimate goal of this tutorial is to offer some guidance in how to navigate these solutions in order to facilitate informed decision-making with regard to cash visibility and analytics.
Step 1: Defining Cash Visibility and Analytics
Cash visibility revolves around obtaining comprehensive and accurate view of the cash position and expected flows. It addresses the need to track, measure and review the performance of financial flows within the enterprise. This extends over multiple dimensions, such as those of geographical spread, profit and loss, customer portfolio, supplier portfolio and so on.
In turn, analytics refers to the process of data collection, processing and aggregation to provides views and insights with regard to cash visibility. It is associated with the development of models and algorithms to analyse transactions and transactions patterns.
Step 2: Implementing Cash Visibility and Analytics
In order to optimise order to cash processes, C-Suite executives need to develop comprehensive cash visibility and analytics framework. This can be achieved through four-step approach:
a. Develop Cash Position Visibility
The first step towards optimising order to cash is to understand the current financial position of the enterprise through an accurate view of its cash flows. This can be done by tracking and measuring the transactional data connected to the companies accounts. The data should then be processed and analysed to obtain an accurate and comprehensive view of the companies financial position.
b. Select Cash Flow Metrics
The next step is to identify the key metrics and associated operational parameters that are related to the cash flow. This requires close inspection of the current accounts and leveraging of the analytics capabilities to gain insights into the operations of the company. The metrics should then be used to measure the performance of the financial flows over time.
c. Develop Cash Flow Forecasting Model
The third step is to develop comprehensive forecasting model, which requires leveraging the cash visibility insights obtained in the first two steps to analyse cash flow patterns. This enables the development of accurate forecasts for the cash flow of the enterprise.
d. Monitor and Review
The last step is to regularly monitor and review the performance of the financial flows. This ensures that the company is taking appropriate steps to optimise its order to cash processes and allows the C-Suite executives to take informed decisions with regard to cash visibility and analytics.
Step 3: Maximising Cash Visibility and Analytics
In addition to the basic process outlined above, there are few best practices that can be used to ensure that the cash visibility and analytics framework is running as seamlessly and efficiently as possible.
First and foremost, it is advisable to invest in technology platform that automates the cash visibility and analytics process and mitigates the need for manual tracking and analysis. Additionally, using predictive analytics to anticipate cash flow changes and intelligently allocate capital is recommended way to ensure the best possible results from this solution.
Finally, it is also important to set up processes to capture and integrate outliers, tail events and other non-standard events in the analytics process in order to obtain the most accurate insights.
Conclusion
Cash visibility and analytics are essential tools for C-Suite executives looking to optimise their order to cash process. By developing comprehensive cash visibility and analytics framework through the methods outlined above and leveraging technological solutions and best practices, executives can ensure insight-driven decision-making and efficient, seamless cash flows.
