Join us to discover best practices and common pitfalls in cash forecasting and cash flow planning. Learn to unlock the strategic value of understanding your company’s cash position at any given time. This webinar features guest speaker Paul Vickers, VP of Finance & Administration at PARTEQ Innovations. Paul will walk us through his company’s journey of implementing a software system to automate cash flow planning and forecasting, delivering visibility into strategic opportunities for his organization. Paul will share lessons learned and cite specific examples of how technology has helped him make better decisions for his business.

1. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Raising your cash flow IQ to
drive growth: Visibility,
predictability, and control

2. Learning Objectives
After attending this event you will be able to:
• Understand how to overcome hurdles in delivering cash
flow forecasts that add value for your company
• Identify key drivers that impact the effectiveness of cash
flow forecasting at your company
• Understand how to recognize signals in the dynamics of
your company’s cash flows to uncover strategic
opportunities

3. Welcome to Proformative
Proformative is the leading educational resource for
corporate finance professionals.
A resource where corporate finance and related
professionals advance in their careers through:
• Uniquely valuable, online peer network
• On demand courses taught by peers and SMEs
• Valuable Features and Resources
Check it out at www.proformative.com

4. Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals
Raising your cash flow IQ to drive
growth: Visibility, predictability, and
control
Keith Bergman, Managing Director, Ledgewood
Advisory Group

5. Objectives of Cash Forecasting
Cash forecasting is the art of estimating the future cash
position. It ensures the right amount of cash is available
when it is needed. When done in a timely, efficient and
accurate manner it enables firms to:
• Manage cash positions in order to meet daily operations
• Control and identify financial problems, e.g. late A/R or A/P
• Increase investment income and reduce borrowing costs
• Manage foreign currency exposures
• Meet strategic objectives with
– budgeting
– capital structuring

6. What’s Needed for an Accurate Forecast
• Determine the purpose and time horizon
– Short term operations
– Medium term budgeting and funding
– Long term strategic planning of capital expenditures
• Collaborate with other departments
– Accounts Receivable and Accounts Payable
– General Ledger Accounting
– Sales
• Identify and obtain the data
– Bank Balance Information
– A/P and A/R
– Payroll
• Aggregate the data

7. Approaches to Forecasting
• Projecting forward balances (time series)
– Review of future receipt and payment schedules
• Variance analysis (statistical)
– Compares historical & actual cash flows for the period
– Provides a degree of accuracy
• Regression analysis
– Requires a lot of data
– Understand the correlations between the cash flows and other
variables
• Pro Forma Financial Statements
– % of Sales on accounts effecting liquidity

8. Trending Approaches
• Projecting forward
– Invoices - Sales & purchase orders
– Payroll - Dividends and taxes
– Interest Income / Expense - Lease income / expense
• Variance Analysis
– Compares historical & actual cash flows for the period
– Degree of accuracy for future projections
• Considering
– Trends
– Clearing patterns
– Seasonal and Cyclical patterns
• Rolling forecast and adjusting periodically

9. Common Mistakes in Forecasting
• Not having current and accurate data
– No communication with other departments
• Not receiving bank data in a timely manner
• Not having enough historical data to predict future trends
• Lack of variance analysis against actual figures
• Forgetting to include tax liabilities
• Forgetting seasonal and cyclical trend adjustments
• Not being able to aggregate data in timely manner

10. Data Collection & Source Identification
Type Direction Data to Collect Possible Data Sources
Bank Account Balance Bank Statement
Operational
Inflow
Accounts Receivables A/R System
Sales Orders Order Entry System
Revenue Budgets General Ledger
Royalties General Ledger
Outflow
Accounts Payable A/P System
Payroll & Benefits Payroll System
Purchase Orders Purchasing
Expense Budgets General Ledger
Taxes General Ledger

11. Raising your cash flow IQ to drive growth:
Visibility, predictability, and control
Thank you for your interest in this presentation.
View the on-demand webinar or download the full
presentation at:
www.Proformative.com