CFRI 2017

Be a Hero – Drive Up Free Cash Flow as Well as Reporting Accuracy and Efficiency

With access to information across the enterprise, finance can be the hero by bringing in-depth analysis and timely insights to give the organization a unique perspective on how to make sustained improvements.

Managing cash flow from operations is a critical function shared by virtually every department in the business: finance, manufacturing, sales, etc. However, when it comes time to explain the differences in the actual results and to prepare guidance, who is in the bullseye?… Finance.

The CEO, board of directors and investors all hold the CFO’s feet to the fire when it comes to cash forecasting, working capital metrics and management’s discussion and analysis. Forecast inaccuracies can have a huge impact on the planned use of cash – plant expansion, technology investments, dividends, stock buybacks and debt servicing to name a few.

Sharing the responsibility for key performance indicators with business executives is critical to helping the organization plan and make meaningful improvements in the predictability of cash forecasting and working capital management. But where do they start? What actions are going to have the biggest impact? What are the root causes of inconsistent or poor performance?

Finance executives are in a unique position to identify and quantify the drivers of working capital and profitability changes and hence their impact on cash from operations. At the same time, finance has a significant challenge in terms of how to acquire granular information in order to help the business with deeper analysis and decision making.

How can finance be the hero? A hero runs towards a problem, not away from it. With access to information across the enterprise, finance can be the hero by bringing in-depth analysis and timely insights to give the organization a unique perspective on how to make sustained improvements. Finance executives are leveraging new technologies and financial related analytics to:

  • Increase visibility, quality and speed of information.
  • Ensure accurate reporting and forecasting on cash flow and other measurements.
  • Improve monitoring of end-to-end processes to make sustainable improvement.
  • Contribute to the ongoing internal initiatives for automation of the finance function.

Tracking performance and monitoring policies are keys to improving operational results and cash flow. Unfortunately, most organizations have multiple applications to deal with critical transactions for everything from inventory, manufacturing, sales, and human resources to finance, supply chain, and more. They may also have multiple instances for different geographies and/or lines of business. Managing performance within a single application can be challenging enough. Imagine the scale and complexity across dozens of enterprise applications with thousands of users and multiple lines of business.

Real-time tracking and monitoring brings tremendous benefits to virtually every enterprise. By ensuring that policies are implemented and followed and that internal and vendor performance issues are quickly identified and addressed, businesses can confidently project and improve cash from operations as well as other financial and operational results.

Mark Kissman is the CFO of Greenlight Technologies.

Be a Hero: Drive Up Free Cash Flow as Well as Reporting Accuracy and Efficiency, 1-hour breakfast session at FEI’s CFRI conference in New York on November 14, 2017, will discuss real-life business examples of ways companies are leveraging new technologies and financial related analytics.