Cashflow management solutions for COVID times
All businesses invest significant time and effort on revenue and cost forecasting, while at the same time often neglecting the crucial scrutiny of cash movements that are necessary for accurate cashflow projections. “Even if profits are forecasted, they do not necessarily translate into cash coming into the business,” says Chris Hewitt, iOCO Solutions Manager.
“A business may appear to be profitable for the foreseeable future, but it can run into severe liquidity problems if the physical flow of cash is not carefully monitored. Managing cashflow has always been important to ensure prosperity and sustainability. This has become more critical than ever under the current conditions of global economic uncertainty due to COVID-19. Millions of businesses around the world will close simply because they don't have enough cash to continue trading,” he says.
Hewitt notes that modelling cashflows can be an extremely time-consuming and complicated process, with many different dynamics to be considered, including:
- Forecasted revenue and expenses;
- Timelines on debtors’ payments;
- Current stock levels;
- Stock required for future sales;
- Loan repayment terms;
- Creditor repayment terms;
- Payment dates for salaries and wages;
- Expected changes to interest rates;
- Exchange rates;
- VAT and corporate tax payment timings;
- Finances that need to be raised in the future; and
- Capital expenditure plans and timings.
“Many businesses use Excel for forecasting and, although it is a versatile and flexible tool, it can be time-consuming and risky.
“IBM Planning Analytics is an extremely powerful and flexible financial modelling tool. It has an Excel front-end with which users are familiar, as well as a compelling Web interface to deliver powerful dashboards. All information presented in the spreadsheet or Web interface is stored and managed in a centralised cube-based database.”
Some notable features include:
A proven tool used by thousands of organisations around the world.
Powerful budgeting, forecasting and cashflow capabilities.
Facilitates modelling of complex budget/forecast and cashflow processes.
Highly scalable and can handle large volumes of data.
Negates the need for multiple Excel spreadsheets, which are error-prone and complicated.
All models are built from the "ground up" with no pre-configured "modules".
Enables the construction of customised cashflow models to cater for organisations’ unique considerations.
Addresses any industry vertical.
“There are many ways to design a cashflow forecast, and each organisation will typically have its preference and required level of complexity or detail. Planning Analytics can be tailored to meet the specific requirements of an organisation.
Planning Analytics can import data from multiple data sources, including relational databases and text files. Typical examples include bank balances from extract files; ERP systems; general ledger/trial balance information; debtors and creditors ledgers; payroll systems, etc.
Where customers are already using Planning Analytics, they can leverage existing income statement forecasts. This can result in a faster turnaround time for cashflow forecasting.
All logic and data are stored at a database level, which results in a 'single version of the truth’ in terms of both data and logic. “Planning Analytics utilises 'in-memory' technology to instantly reflect changes to data and parameters. This facilitates powerful scenario, 'what-if', analysis."
Hewitt concludes that iOCO’s team of skilled consultants engages with customers to tailor a powerful, automated solution to meet requirements, model scenarios and give complete cashflow visibility.
Established to simplify ICT, iOCO is Africa’s leading integrated technology services company, with the largest concentration of skills on the continent. As a Level 1 B-BBEE end-to-end ICT managed service provider and Cloud systems integrator, iOCO operates with over 20 years’ experience. Its team of more than 4500 specialists delivers Open Digital Integrator, Enterprise Applications, Data and Analytics, Compute and Platforms, Digital Industries, and Manage and Operate solutions to over 1 000 customers.
Inspired by digitally native internet organisations (iO) and creative organisations (CO) of the future, iOCO helps customers navigate the path to an exponential future. To achieve this vision, iOCO holds strategic OEM partnership agreements with more than 90 global leaders.
Effective performance management is about being able to quickly and intuitively assess the state of your business and to anticipate the best course of action for better outcomes. iOCO, through our Data and Analytics centre of excellence, works closely with companies from a wide range of industries, assisting them to use their BI, FPM and Predictive Analytics technology to achieve business goals.
For more information, please visit: https://ioco.tech/solutions/data-and-analytics/
iOCO is part of the EOH Group of companies.