Cash flow planning is included for multiple entities

Description

The software should have the capability to manage, forecast, and analyze the flow of cash in a consolidated manner and at a more detailed entity level. This is essential for sustaining operations and facilitating easy budgeting and forecasting at a micro and macro level.

Example Use Case

Scenario: A mid-sized company with several business entities, such as multiple branches or subsidiaries, uses CPM software with cash flow planning capabilities. The company needs to track the cash flow schedule for each entity to manage debt, operating costs, and capital investments.

Solution: The CPM software allows the company to examine cash flow for each entity and permits consolidation of data for a universal overview. The system's built-in cash flow forecast feature facilitates the prediction of future cash flows, based on historical data and future projections. This feature empowers the company to strategize and make informed decisions while ensuring optimal usage of cash resources.

Considerations

Planning tools generally contain cash flow statements, but are used more for summarized forecasting and actuals reporting. For true day by day cash flow forecasting, you really need a dedicated system that is tied to a combination of the bank and your accounts payable system. In other words, if your primary requirement is cash flow forecasting, a traditional budgeting and forecasting tool is not what you're looking for.

When introducing entities, this becomes more complicated as some entities may be on a different ledger, or maybe it is a trading entity that has no real cash flow. Make sure the software suits your specific use case.

Questions to Ask a Vendor

• Performance: How accurately can your CPM software forecast cash flow trends for each business entity? How granular can we get?
• Real-Time Updates: Does your CPM offer real-time data updates to ensure we have the most recent cash flow overview for decision-making, or it this more of a monthly exercise?
• Scalability: How well does your solution scale to accommodate the expansion of our business entities?