An alignment of people, processes and technology is critical to developing a cash flow forecast that is accurate and optimizes your working capital. The cash flow management decisions you make will have consequences for your current business and future plans.
“Cash flow forecasting has a serious impact the company’s borrowing and investment decisions,” said Ernie Humphrey, CEO & Founder, 360 Thought Leadership Consulting.
Financial agility is another area where cash flow forecasting is critical to a company’s success, Humphrey noted. Areas such as investment in equipment or acquisitions targets are driven by the company’s cash flow position, he noted.
Humphrey offered up a few additional reasons why effective cash flow matters:
- Increased visibility into the sources and uses of cash along with the associated costs and benefits;
- Improved management of debt covenant compliance risk; and
- Increased investor focus on cash balances and cash deployment efficiency
For more on the myths and realities of creating and executing an effective cash management strategy, click here to view the webcast.