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Manage Cash and Improve Liquidity with the CCH Tagetik Smart NOW Cash Flow Planning App  

Jul. 9 2020 by Sonia Barbarossa, Technology Product Management Associate Director​ - CCH Tagetik

Performance Management Budgeting & Planning

In his recent blog, my colleague Alex Stevens said, “Raise your hand if you haven't had to do a 2020 reforecast.”  The result? Not a single (virtual) hand was raised. During times of uncertainty, cash flow should be one of the first things to capture our attention. As the great magnifier, the pandemic has shone a bright, blinding light on cash flow problems — amongst all others. The old business adage says cash is king. But in times of crisis, cash becomes a king on fire. We, the Office of Finance, must put the fire out, for it rules all processes, activities, and operations.   

The ability to monitor cash flow, re-plan cash flow and perform robust cash flow analysis is critical to maintaining solvency, understanding liquidity risks, and even just keeping the lights on during black swan — or any sudden — events. And yet, so many organizations struggle to lasso the information they need to perform this essential process. 

The Biggest Challenges to Cash Flow Planning  

Changing Cash Requirements: Market uncertainty, changing strategy, unexpected business pivots — cash requirements are always changing. Gauging liquidity and the risks to liquidity isn't easy, nor is analysis reliable without a thorough review of cash and working capital.  

Long-Term Investments: Business moves quickly, and even the smallest change to cashflow can have cascading effects. Most organizations don't have the visibility into their cash flow to determine whether business decisions will work in the long-haul.   

Lack of Context Between Cash Flow and Other Financial Statements: Organizations that rely on offline manual processes, spreadsheets, and fragmented point solutions can't see the cash impacts of decisions on the income statement, balance sheet, and cash flow statement. What does this mean? They lack critical insight. What's more, the yearly planning process is typically limited to the profit and loss statement. Planning the balance sheet and cash flow is seldom considered. When push comes to shove as economies tremble under the weight of the pandemic, this is a major miss for organizations who are in the dark on the true state of their solvency.  

When you need a finger to the pulse of your cash flow — fast — we have a solution. CCH Tagetik Smart NOW Cash Flow Planning app is a ready-to-go solution that’s fast to deploy so you can start planning cash flow today. 

The App In a Nutshell 

The CCH Tagetik Smart NOW Cash Flow Planning app equips you with instant cash forecasting, which is critical to reducing financial risk and improving your liquidity. This way, you can keep a finger to the pulse of your cash position, currency fluctuations, and interest rates, while pinpointing precisely how much working capital you need to pay the bills. The app comes with pre-packaged cash flow intelligence, including built-in report templates, dashboards, ratios, and financial intelligence for hedging liquidity, interest rates, and currency shifts. Since the app is built on top of our Finance Transformation Platform, you access real-time data and can instantly transform, simulate, and project cash flow.  

When you need to know your cash needs, check the sustainability of an investment, or analyze the effects of different payment terms, you can compare scenarios by simulating assumptions on your financial statements to determine the best path to take.   

3 Reasons to Get This App  

Reason 1:  Reforecast Cash Flow Instantly with Pre-built Cash Flow Intelligence 

Foresee, or better yet, avoid cash flow crunches with our app’s report templates for cash, net working capital, and net financial position. These pre-built reports reduce human-effort by populating with your real-time data automatically. Our dynamic reports and dashboards and ratios — including operating cash flow (OCF), net debt/equity, total free cash flow (TFC), Current and Quick Ratio— are pre-configured, which means you’ll always know how much cash you have. This way, you can test for solvency and liquidity on an on-going, instant basis.    

Reason 2:  Make Better Decisions For Cash Flow Using Simulations and Modeling 

When you have to make weighty decisions under pressure — a la pandemic crisis mode — a tool to test scenarios and your assumptions is critical to choosing the best course of action. Hand in hand with this is the ability to do these tests rapidly. Our high powered data engine, the CCH Tagetik Analytic Information Hub, connects your granular financial and operational data into one trusted source that facilitates real-time answers to your cash flow questions.  

Whether market conditions force change on you or you’re considering a new course of action, our app enables you to simulate the effects of what-if scenarios to determine cash requirements or cash impacts. Our data engine provides rapid data processing, which means you can update assumptions, adjust drivers, and preview the entire chain of effect on all corresponding plans and financial statements. 

Reason 3:  See the Impact of Cash Flow on Financial Statements 

The solvency of changing scenarios or prospective decisions is only truly determined by the impact on your financial statements. This app helps you navigate market uncertainty by enabling you to project variables, drivers, best-case, and worst-case scenarios to see the effect on your fixed costs. Whether you have to vary policy rules like Days Sales Outstanding (DSO) or Days Payable Outstanding (DPO) or play out financing and investments, the app immediately shows you the P&L, balance sheet, and cash flow impact.  

If you’re thinking, this is great but software implementations are notoriously long, and, in times when you need it, a classic case of too little, too late — think again. Built to get you up and running quickly, we developed this app for rapid deployment.  

Are you ready to take the cash flow planning reigns? To learn more about how our app will put out cash flow fires – in times of crisis and beyond, register to the webinar Smart NOW cloud app: CCH Tagetik Cash Flow Planning here.

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