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Cash Management & Technologies for the CFO

By Carlos Catalan .

Digital transformation is a key enabler of cash management processes for the overall finance function. Velocity and acceleration of processing information is what middle-market companies are striving to accomplish in the next 14 to 18 months. The ability for digital technologies to automate specific activities and gain operational efficiencies is extremely important for a company in order to improve its bottom line. We know that cash is one of the most important elements of running a business. This is why having an efficient process, mixed with the right technologies, can allow the CFO to monitor the efficiency of receipts and payments of cash, cover deficits, and make best use of surpluses and maintain cash availability for capital expenditures or distribution to business owners.

Below are key digital transformation concepts supporting cash management processes and technology for CFOs to focus on: 

  • Cash Flow Cycle and Forecasting Process
  • Cash Management Virtual Cloud Solutions for Centralization, Visibility, and Data Repository
  • Robotic Process Automation for Acceleration and Velocity of Processing Information

Cash Flow Cycle and Forecasting Processes

As a CFO, you may have experienced the negative effects of inconsistent cash flow – from the manager who stocks up on supplies so he or she does not need buy again in the near future, tying up cash flow, to the procurement resource who inadvertently agrees to unfavorable terms, e.g., 10-day payment terms. Situations like these can cumulatively undervalue the business performance over time. Regardless of the business reasons, a company has the responsibility to make payments when due, whether sufficient cash has been collected from your customers or not. This is where creating, developing, and maintaining a regularly updated cash flow forecasting model is critical for any size business. Such a model will allow the CFO to anticipate the timing and amounts of receipts and payments, enhancing positive free cash flow.

As you think through your cash flow forecasting process, the diagram below can help you to develop a more systematic approach to your free cash flow process.


Depending on the level of your cash position, you will need to refresh your cash flow forecasting model daily, twice per month, or even monthly. Having a good process for this in place that enables collection of information from different data sources, and monitoring your bank accounts, accounts payable, and accounts receivable, will allow a more accurate cash flow forecasting model. Examples of some leading practices include:

  • Reconciling your bank accounts on a daily basis is extremely important, and performing a month-end balance sheet account reconciliation to the bank statement will increase the level of accuracy and uncover discrepancies. Tracking and collecting your accounts receivable faster, providing discounts for early payments, or providing credit terms for customers at 30 or fewer days, and having a good team that actively follows up with customers for collections is key.
  • Increasing your cash position by making sure that invoices owed by your company are paid as close as possible to the due date and maintaining a good relationship with your suppliers.
  • Maintaining a well-organized payment process that can capture the frequency of payments (e.g., monthly, intermittent, or infrequent) will allow you to anticipate those infrequent payments and provide a more accurate picture of your business cash position during your forecasting process.

By incorporating technology into your cash flow forecasting process, you will be able to operate at a faster pace and minimize information processing time. In this article, we have narrowed down two technology solutions that can help you get up and running: Cash Management Virtual Cloud Solutions and Robotic Process Automation.

Cash Management Cloud Solutions for Centralization, Visibility, and Data Repository

Cash Management Cloud Solutions help you refresh balances faster and more accurately in your cash flow forecasting model, with minimal manual effort. These applications typically have an automated workflow that triggers when the collection of information is needed across different contributors of the process. Variance detection features will tell you when users have submitted data that exceeds a predetermined threshold, allowing you to maintain a more controlled environment and enhance quality. Lastly, running reports and performing analytics with defined metrics and liquidity ratios will help you make better decisions. These applications will allow you to centralize the process, gain visibility so your resources can work more effectively, and have better organizational skills. 

Robotic Process Automation for Acceleration and Velocity of Information Processing

Robotic Process Automation (RPA) is another top digital transformation technology that allows the business to accelerate its information processing by automating repetitive and time-consuming activities. One of the key differentiators of RPA is that it can work with your current IT systems, allowing fast and nimble implementation to bring quick value to your resources. From a cash management perspective, we know that we can apply RPA to processes such as bank reconciliations by looking at daily or monthly balances from different bank portals, performing calculations to identify any spike or dips in bank accounts, and helping to understand the flux of certain accounts.

Middle-market companies are moving towards acceleration of information processing, freeing up time for resources to focus on analytical work and allowing technology to take repetitive, manual, and time-consuming activities away from your team members.

Using the concepts mentioned above, Citrin Cooperman’s Digital Transformation Practice brings you the latest digital technologies and sophisticated finance processes, enabling you to lead your finance organization and the overall growth of your business. Contact us to find out how we can help on your finance transformation journey.

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