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

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

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.

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 regard 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 at http://kyri.ba/CashFlowWebinar. 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 website at http://kyri.ba/cash-forecasting-paper.

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.

About Kyriba
Kyriba is the global leader in next generation treasury solutions in the cloud. We enable CFOs and finance teams to increase compliance, reduce risk, and provide the insight necessary for strategic financial decision-making. Kyriba’s award-winning cash, treasury, payment, risk management and supply chain finance solutions are highly secure and scalable. With a client loyalty rate of more than 98 percent, Kyriba supports Global 2000 enterprises and fast-growth mid-market companies, including Amway, Electronic Arts (EA), Interpublic Group, PulteGroup, Inc. and Qualcomm. For more information on how to become a strategic partner to your organization, contact treasury(at)kyriba(dot)com or visit http://www.kyriba.com.

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Tim Wheatcroft
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