Last Friday we had another Breakfast session at ING Metropool. Keeping in mind the Slogan "Never change a winning team", we kept the same recipe as compared to previous sessions: 1. Strong Content, 2. Limited # of Attendees, 3. From the Field.
First of all, the starting point of our discussion was a CFO Dinner moderated by Geert Peeters, CFO Metallo Group, early June around "The CFO of the Future".
During that session 4 pillars were identified as Critical Key Areas for the CFO's going forward :
- Business Partnering
- Strategic Direction
- People Management
This Demo from Cashforce linked perfectly to Pillar 3 "Technology". How can CFO's embrace technology whilst preparing for the Future? (December 14th we will have another interactive evening session moderated by Frank Geelen on how the power of Technology can help people and companies grow and prepare for the Future.)
Let me share some key takeaways from Friday's session.
Cashforce is an innovative Cash & Treasury Management System, focused on automation and integration with a team of Cash flow & IT specialists. They have offices in BE, NL & US (New York) (UK & FR coming soon) and their Customers are large to mid-size global enterprises. Cashforce is backed by Techstars Ventures, Volta Ventures & Pamica.
The Breakfast session was very well structured. Amazing what you can learn during a 1 hour demo! Going from "Why do we make Cash Forecasts?" and "What are the Challenges preparing these Forecasts?" to "How can you tackle these Challenges?".
There are multiple different Reasons for making Cash Forecasts. Going from "Future Growth Financing requirements identification", "Cash Optimization", "Dividend Policy" to "Bank Cost reduction & Negotiation" and even "Because it is part of our Reporting requirements"...
Next to the reasons why we do the Forecasts there are even more Challenges to make good Cash Forecasts. Most of the CFO's are faced with "Multiple Entities, Banks and Currencies" in combination with often complex ERP systems/requirements. Add to that equation the fact that "Number crunching & data analyses is very time-consuming", a "Limited number of people" are involved with often "no corporate cash flow awareness" and most "Targets are only set once a year", you could conclude that there is "Very Limited time for corrective Actions".
So How can we tackle these Challenges? Cashforce uses a 6 step approach.
They have split out the Working Capital Cycle into 4 subcycles with easy-to-measure KPI's (DSO, DIO, DPO, CCC).
What is eating or feeding your Cash?
A tip shared by Nicolas was to drill-down and look at Cash flow models per industry / business model. Cashforce has documented Business Models for Distribution, Telco, Manufacturing, Retail, Insurance, Construction, Services, Travel, ...
During the whole session Nicolas was combining their 6 step model with demonstrating it in the Cashforce tool itself. Amazing as to which level of detail you could understand and drive your Cash.
He demonstrated briefly how the 6 steps are translated in the tool and ended with his view on how to define your cash forecast logics / assumptions. "Link the right data to the right term (Short / Medium / Long) … and apply the right & smart logic as per the different types of Cash Streams".
This briefly summarizes a very inspiring demo-session about "Smart Cash Forecasting & Treasury" last week moderated by CEO of Cashforce, Nicolas Christiaen. A session linked perfectly to Pillar 3 "Technology".
If you want to stay in the loop on our journey with respect to "The CFO of the Future", stay tuned. If you're a CFO yourself and want to participate, subscribe here.
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