One of the most intriguing discussions at September’s EuroFinance conference was around whether or not firms were overcomplicating their forecasts.
The panel looked at how treasurers could assess the inaccuracy of 30-day and quarterly cash forecasts and improve the main drivers of accuracy, analyzing the internal and external metrics that had the most impact.
According to panel participant Daniel Blumen, a US-based treasury consultant and partner at Treasury Alliance Group, the main issue for treasurers is distinguishing between one-off problems – a delayed payment or a sale that did not materialize, for example – and structural issues, such as a lack of clarity on the process from the businesses providing the data.
Looking at inaccuracy is critical because it is the only way to assess the quality of the forecast.
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