Proactive cash forecasting puts treasury in the driving seat
Euromoney speaks to Benjamin Seal, vice-president of treasury at US-based Cenveo, about how accurate cash forecasting has helped to address the supply-chain challenges posed by the global pandemic.
Cenveo is a leading North American manufacturer of envelopes and custom labels that has been around for more than 100 years. Headquartered in Stamford, Connecticut, it employs more than 2,900 people across 20 facilities in the US and delivers products and services to some of the world’s most recognised brands.
“We received four or five price increases during 2021, which required us to quickly adapt our cash forecasting and liquidity models,” he explains.
If you are being reactive, you are behind the eight ball. If you are being proactive … treasury becomes a true strategic partner
The company has continued to model different scenarios – such as future unexpected price increases – which allow it to better manage liquidity by optimising working capital to improve days sales outstanding, days payable outstanding and days inventory outstanding.
“If you are being reactive, you are behind the eight ball,” Seal tells Euromoney. “However, if you are being proactive based on the scenarios you are providing to management and making those recommendations or even driving those projects, treasury becomes a true strategic partner.”