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TREASURY UPDATE NEWSLETTER - 2017 Q 2
and Tableau to include forecasting will not only be
less expensive than the adoption of a TMS, but will
provide a greater level of benefit to the firm. Having
already witnessed the capabilities that Alteryx and
Tableau provide for other treasury-related functions,
he is confident that expanding treasury’s use of the
solutions to include forecasting will provide his team
with the level of automation and accuracy that they
are looking for.
The viewpoint held by Peterson is not an
uncommon stance for some corporate treasurers
to take. However, there is an alternative viewpoint
held by many other treasury practitioners who see
the upgrades and enhancements that have occurred
in the TMS realm as holding significant value. As a
means of highlighting both viewpoints, we allowed
Kyriba, a leading provider of treasury software,
to offer a counterargument on the benefits of a
modern-day TMS. Greg Person, VP of Global Presales
and Strategic Value at Kyriba, shared the following
insights.
INTRO TO CASH FORECASTING
Accurate cash flow forecasting continues to
challenge global treasurers, which is why it's been a
topic of debate in treasury thought leadership forums
for years. The complexities of cash flow forecasting
are evident when one considers analyzing thousands
of cash flow inputs: AR, AP, payroll, tax, legal, global
subsidiaries, etc., not to mention the timing of these
cash flows. In many ways, cash flow forecasting
requires a special artistry and not simply a scientific
approach. During my years in corporate treasury,
where I managed a complex free cash flow, we
referred to this artistry as the treasury touch. Thus,
when we consider the right tool for our craft, what
could be more appropriate than the mighty and
dynamic Excel spreadsheet?
EXCEL: PROS & CONS
There is no dispute that Excel offers a unique
level of individualized flexibility. However, this
often results in complex models that may sacrifice
accuracy and workflow efficiency, a particular issue
when multinationals share data across email. The
flexibility of Excel is often its Achilles heel, because
the inputs and processes can become muddled from
user to user and are highly error prone.
Similar challenges occur when managing a
complex cash flow forecasting program within Excel
across global teams. As previously mentioned, a
comprehensive cash flow forecast has a number
of dependencies. Therefore, extracting the required
forecast inputs, ensuring the related formulas, pivot
tables, and vlookups are functioning accurately,
and making sure the spreadsheet is understood
by everyone, not just Excel gurus, is a fundamental
concern. Additionally, there will be Excel inputs and
submissions by various departments outside of
treasury; thus, ensuring the integrity of these Excel
templates and roll-up exercises are equally not to be
taken lightly.
Finally, there is the topic of variance analysis and
measurement of the forecast. Often, treasurers
spend excessive amounts of time trying to
uncover the reasons for forecast error, scouring
through bank statements and accounting entries
Peterson asserts that further integrating
treasury operations with Alteryx and
Tableau to include forecasting will
not only be less expensive than the
adoption of a TMS, but will provide a
greater level of benefit to the firm.
The flexibility of Excel is often its
Achilles heel, because the inputs and
processes can become muddled from
user to user and are highly error prone.
Kyriba's Counterargument: The Benefits of a TMS
In many ways, cash flow forecasting
requires a special artistry and not
simply a scientific approach.