Fewer Than One in Three Cash Flow Forecasts are Accurate, Shows New Kyriba Survey

June 18, 2014

Six in 10 treasury professionals see “significant” or “major” variances in cash flow forecasts

SAN DIEGO – June 24, 2014: Most treasury cash flow forecasts contain significant inaccuracies, according to a new survey by Kyriba, the leader in cloud-based treasury management software.

A survey of more than 200 treasury professionals revealed that organizations’ overall confidence in their forecast accuracy is low: no respondents believe that they have a “highly accurate” forecast, with only 32 percent saying that their forecast is “accurate, with no significant variances”.  More than half of respondents (53 percent) claimed that their forecast has significant variance, while eight percent of forecasts are “very inaccurate, with major variances.”

Respondents also cite a variety of challenges facing them with regards to cash forecasting. Almost two-thirds (65 percent) see a lack of visibility into all forecast data inputs as their primary challenge, while one-in-five view communications issue with other internal stakeholders as their largest challenge.

“Accurate cash forecasting is the bedrock of an effective treasury operation, but as these results show, it is still an area where many organizations fall short,” said Jean-Luc Robert, chairman and CEO of Kyriba. “Developing a reliable cash forecast, be it short- or long-term, requires accurate up-to-date data from banks and ERP systems, as well as close collaboration with other stakeholders across multiple business units. If either of these elements are missing, it could have a severe impact on treasury’s ability to deliver an accurate forecast to the CFO.”

The survey was conducted during a webinar Developing an Accurate Cash Flow Forecast, a replay of which can be viewed here. Kyriba has also released a white paper in conjunction with the webinar, entitled Short Term Cash Forecasting: Best Practices and Pitfalls to Avoid. It is available for download on Kyriba’s web site at here.

How accurate is your cash flow forecast?

  • Highly accurate (almost no variance): 0%
  • Accurate (some variance, but not significant): 32%
  • Somewhat accurate (some significant variances): 53%
  • Very inaccurate (major variances): 8%
  • Variances aren’t analyzed: 8%

What is your biggest cash forecasting challenge?

  • Don’t have visibility into all forecast data inputs: 65%
  • Lack of communication with other stakeholders: 20%
  • Don’t have time / resources: 10%
  • Other: 6%

Online survey of 212 treasury professionals conducted on June 12, 2014.