An efficient short-term cash forecasting process helps businesses make better decisions when disruption hits.
As laid out in a CFO.com article, in moments of disruption—whether from a pandemic, a recession, or something else—the ability to prepare an accurate short-term cash flow forecast becomes critical. The capability of the CFO to create and adjust these forecasts quickly allows management to make better and more informed decisions about the organization’s cash needs, investments, and expenditures when the going gets tough.
A CFO Will Help Break Down Silos Within an Organization
What prevents businesses from quickly generating accurate cash flow forecasts? It is often the result of poor communication and collaboration between functional areas and/or departments that provide the inputs for the forecasts. For example, if your finance team is not actively working with your procurement team, you may not know about the large expenditures they are planning or have already made. Similarly, with sales: you may underestimate required cash expenditures before the cash inflows occur. Collaboration and communication with all relevant stakeholders will keep errors, mistaken assumptions, and subjective guesswork out of the forecast.
Not sure how to make your short-term forecasting process more efficient? A fractional CFO brings strategic financial planning to small and medium-sized businesses just like yours. Reach out today to learn how we can help your organization get the reports and insights it needs to make informed decisions and thrive in uncertain times.