Most treasurers are acutely aware of how much work cash flow reporting and forecasting is to manage — and what real-time end-to-end cash visibility could mean for their business. However, convincing the CFO to spend on a Cash Reporting Platform that would provide this kind of visibility can be quite a challenge since they’re not always exposed to it day to day.

If you’re ready to enhance your business’s cash flow visibility but need help garnering the C-suite’s support, we’ve outlined the process we’ve seen work most successfully. This is the same process we, as a cash flow analytics company, use to help our customers determine whether our solution is right for them.

1. Base Your Business Case on Critical Liquidity Objectives

End-to-end cash flow visibility has real ROI for any business at any time (we’ll explore that in the next section). But we find earning the buy-in from your CFO is typically most successful when you tie the benefits of investing in a Cash Reporting Platform to your business’s current liquidity objectives or challenges.

Before you start pitching a solution, identify what your CFO perceives as pressing problems. Make a list of your business's most urgent liquidity challenges and opportunities — then highlight the issues that are top of mind for your CFO. This commonly includes:

1. Risk Management. The most obvious need for clearer cash visibility is to manage cash and liquidity risk across the business. It’s highly likely that any business case for improved cash reporting will highlight the expected risk management benefits.
2. Acquisitions. Acquisitions deplete cash and liquidity very quickly, leaving businesses vulnerable to liquidity shocks or in some situations a full blown crisis. Enhanced cash flow visibility helps ensure those investments are made in a sustainable fashion.
3. Hypergrowth. When your business is in hypergrowth, cash rarely sits still for long before it’s invested. A Cash Reporting Platform helps you deploy capital toward growth activities while also ensuring you won’t come up short.
4. Seasonality. Seasonal revenue fluctuations can create a liquidity crisis if they’re not adequately planned for. But if you can see your cash flow data and projections in real-time, you can plan around these and continue to invest confidently.
5. Supply Chain Fluctuations and Disruptions. Businesses today are currently experiencing massive supply chain disruptions. Enhanced cash flow visibility can help you manage risk and optimize investments simultaneously no matter what is happening.

Some businesses may not have a specific objective like those above to build the business case on (while others might have more than one). However, almost every business needs to balance risk while maximizing investments in order to stay healthy. That’s a liquidity objective on its own a Cash Reporting Platform could greatly improve.

2. Demonstrate How a Cash Reporting Platform Provides ROI For Your Objectives

Once you’ve determined the key objective(s) enhanced cash flow visibility could help your business achieve, the next step is demonstrating the return your business would get from investing in a solution that provides that visibility. Here are a few areas where a Cash Reporting Platform will provide ROI you can actually measure.

Operational Savings

Cash Reporting Platforms can save businesses hundreds of days of operational time spent on cash reporting and forecasting across a business per year. The time saving alone often amounts to many multiples of the annual subscription cost  in ROI.

Interest Savings

Clear and reliable visibility over future cash requirements and surpluses allows you to make better use of excess cash for repaying debt or investing in interest-bearing instruments in real-time. This helps reduce your net interest expense and increase your interest income.

Working Capital Improvements

A Cash Reporting Platform will help you make demonstrable improvements to working capital which will help you keep more cash in the business for longer. For example, it will show you the payment behavior of your customers, allowing you to target collections improvements. Similarly, it will help you understand internal payment behavior, in turn highlighting where opportunities may exist to sustainably preserve cash flow.

Adding up the ROI

In CashAnalytics we target a minimum ROI on the operational savings alone of 200%. When the interest savings associated with better debt-cash optimisation and the value of the extra cash on your balance sheet due to working capital improvements, the total ROI often exceeds 500% per year.  

3. Acknowledge Indirect Benefits That Provide ROI for Your Objectives

In addition to the ROI you can measure directly, there are also intangible benefits that will impact your bottom line in ways you can’t. For example:

• Improved Data Quality and Forecast Reliability. Cash flow forecasts are only as useful for informing action as they are accurate. And since a Cash Reporting Platform gives you the ability to check the quality and accuracy of forecast data, it means you can actually measure how reliable any insights you learn from your forecast might be.
• Greater Business Agility and Understanding. Real-time, end-to-end cash flow visibility improves the agility of your business because it helps you make more informed decisions faster. According to research from McKinsey, improvements in agility could result in a 20% to 30% improvement in financial performance. However, business agility (and any ROI a cash reporting platform might create) is incredibly difficult to measure. So determining the direct impact of any investment would be extremely tedious, even though you’ll see one.
• A Reduction in Key Person Risk. Manual cash forecasting and reporting processes rely heavily on individuals within a company to carry out repetitive tasks to ensure the process is effective. Since a Cash Reporting Platform automates much of the reporting process, it helps protect your business from upheaval if that person were to leave.
• A Stronger Cash Culture. An investment in forecasting and cash flow reporting helps develop a strong cash culture you can support in a sustainable fashion, day in and day out. And since it helps centralize cash flow data, it also helps align your business from a cash point of view.

Each of these points of indirect ROI can also be used to support specific business objectives. For instance, greater agility enhances your ability to deal with seasonality or supply chain disruption, and a reduction in key-person-risk helps reduce the amount of time and money it takes to train new employees when you’re growing rapidly.

Need Help Building Your Business Case?

Every business has different objectives and priorities. If you need help developing the business case for your specific objectives, we can help you assess where your business might benefit most from enhanced cash flow visibility. Contact us here, and we’ll help you think through the business case for your application.

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