Pairing Up AI with Cash Flow Operations is Paying Off

Cash flow routinely ranks highly on any chief financial officer’s “to-do” list.

A case in point.

“Improving cash flow” is a huge priority for CFOs according to the 2022 Global CEO Survey from Everest Group and WNS.

In fact, cash flow improvement was the top “priority” category for corporate financial officers, outpacing compliance and control reviews, organizational information improvement, and business strategy assessment, among others.

Cash flow rising as a bigger deal for companies is a sign of the times, as interest rates soar and the cost of capital has skyrocketed in recent years.

With companies increasingly embracing real-time cash analysis forecasts day sales and payables analysis and dashboards, and as companies continue to climb out of the weeds in a post-pandemic, post-lockdown world, knowing where you stand with cash analysis is a big deal to CFOs.

On the relative upside, CFOs appear to know they have a cash flow problem and are taking steps to add technologies like predictive analytics and behavioral statistics models to the cash analysis mix. Over 70% of CFOs say their companies are boosting information technology spending outlays, especially in the area of data analytics.

Forging a Strategic Path with AI

With digital outlays and insights on the line, there’s another massive trend going on in the CFO suite – a shift to artificial intelligence to boost their cash management forecasting needs.

“AI and ML are transforming everything treasury: it’s the equivalent of the Industrial Revolution 4.0,” said Bank of America head of data and AI Jarrett Bruhn in comments to PYMNTS.

The secret is out on AI and its ability to boost performance levels in the treasury and finance departments.

“[AItTechnology investments] are about continuing to enhance traditional concepts like planning and budgeting and forecasting. How do we use more predictive information and [automate inputs so we don’t] spend all the time building out scenarios, but instead help the finance team build out plans for how to move the business forward strategically,” says DPR Construction CFO Angela Floyd.

Higher investments in AI for cash management forecasting seem to be paying off.
Take envelope manufacturing company Cenveo, which reports a 93% improvement in cash management forecasting accuracy and a 90% boost in productivity and performance after deploying an AI-driven enterprise liquidity management platform from Kyriba. The company is now using predictive analytics merged with real-time data and workflows for all of its treasury operations.

In two months, the company was able to save 600 employee hours and saved $1 million as the AI platform allowed Cenveo to steer more company resources into cash-producing departments and cut its cash management labor hours.

“Cash forecasting is a more recent use case (for AI), where we see treasury teams wanting the technology to predict a more accurate clear date or payment amount than what their [enterprise resource planning for accounts payable or accounts receivable] data provided them,” says Bob Stark, global head of market strategy at Kyriba in an interview with Global Finance. “Generating new data insights is an emerging area, inspired by large language models and ChatGPT, and fueled by the need to plan liquidity needs to support M&A and entry into new markets where historical data simply did not exist.”

If that’s the reality for AI and cash management going forward, CFOs will gladly take it, especially as they steer their company’s financial course in tough economic times.

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