Automation has transformed cash-flow forecasting at Pearson
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Treasury

Automation has transformed cash-flow forecasting at Pearson

Artificial intelligence revolutionized cash-flow forecasting at educational services provider Pearson, allowing it to respond quickly to the challenges created by the pandemic.

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When James Kelly, senior vice-president treasury, risk management and insurance, joined Pearson in 2017 he decided to focus on areas where he felt treasury could add the most value – providing capital-structure advice (dividends, share buybacks), debt raising, risk management, and in-house cash expertise.

Pearson is a leading player in the learning market, with approximately 20,000 employees providing customers in nearly 200 countries with digital content, assessments, qualifications and data. In the last financial year, the company made an adjusted operating profit of £385 million.

“One of the key things we have done is try to use software as a service and keep this as simple and effective as possible,” he says. “The methods we had for analysing cash flow weren’t really good enough for us to fully understand the key drivers of cash flow, where the pain points were, and how to improve working capital.”

The initial challenge was that the company had a complicated set up of 600 accounts across 60 different currencies and 30 businesses that were running their own treasury centres and cash-management operations with limited reporting to the centre.

Kelly


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