Strategic thinking requires a two- to three-year approach, starting with aligning the finance budget with procurement and recruitment plans. A cross-functional team from finance, procurement, and HR should consolidate data and identify ways to optimize the budget. Awareness sessions on budget utilization are essential, and in the first year, all departments must follow the plan, supported by leadership. Any unplanned expenses should require exceptional approval from senior management. Over time, this approach aligns departments with the plan, reduces variances between forecasts and actuals, and demonstrates the organization’s financial maturity.

1. Run multiple scenarios: not only will it help you understand what different outcomes look like but it'll also help you see how you're tracking over the forecast period and which scenario you're leaning most towards. 2. Update your forecast regularly and understand the variances: the cadence will be up to you but doing this helps ensure you have a clearer picture of the landing position and ensure that there aren't any nasty surprises that have been left to run rampant. 3. Engage your key stakeholders: if you're working across multiple stakeholders responsible for various parts of the forecast, work collaboratively with them and understand where your thinking may differ.

Best-case, worst-case, and most likely scenarios help prepare for unexpected changes & sets a range instead of a single prediction, allowing for more flexibility. CF forecasting is a living document - update monthly or even weekly based on new data or changes - after each cycle, analyze what went right or wrong. integrate learning into future forecasts Regularly communicate with suppliers, customers, and other stakeholders. Their insights can provide clues about payment behaviors and market conditions. Also, build a small cash reserve to handle unexpected expenses Use tools like Power BI, Tableau etc. to analyse & present forecasts. Tools that integrate with other business systems can provide real-time insights and improve accuracy.

The algorithm to accurate forecast is: 1-Data Quality: Garbage in, garbage out. Implementing better data governance, like standardized reporting templates and automated data feeds, is crucial. 2-Refine Forecasting Methods: Move beyond simple linear projections. Consider using a combination of methods like a) Rolling Forecasts.(Instead of 5 to 7 year plans, make yearly or even quarterly plans) b) Activity-Based Forecasting. (identify your cost drivers) c) Scenario Planning/Sensitivity analysis.(best-realistic-worst case scenario) 3- Variances Reporting. ( This will help you identify where you lack the planning phase) 4- Invest in the Right Tools. (Excel is good but as the complexity grows so does the need for an advanced tool)

Automatize a coleta e análise de dados: Use algoritmos de IA para consolidar informações financeiras em tempo real. Identifique padrões e tendências: A IA detecta insights ocultos nos dados históricos, ajudando a prever cenários futuros com maior precisão. Simule múltiplos cenários: Modelos preditivos baseados em IA permitem ajustes ágeis para lidar com incertezas do mercado. Integre sistemas financeiros: A inteligência artificial conecta dados de diferentes áreas, garantindo uma visão unificada e estratégica. Com IA, você transforma previsões imprecisas em decisões assertivas e estratégicas.

Overcoming cash flow struggles is crucial for the sustainability and growth of any business. Here are some actionable steps to help manage and improve cash flow: -Review Financial Statements -Long-Term Forecasting -Improve Invoicing Practices -Cut Unnecessary Costs -Negotiate with suppliers for better credit terms -Optimize Inventory Management -Right selection of Accounting software -Expense Tracking Tools

Historical data is the start point of the forecast but it's quality and the related assumptions need to be realistic and reflect the ongoing business situation. Flexibility in forecast allows to respond to the changing needs of the cashflow in the business. This combined approach has always worked well for cashflow and other operational forecasts for me.

An often missed piece of effective cash flow management is setting a threshold amount which upper management needs to notify accounting before spending. This will allow the accounting department to communicate any conflicting expenses and reprioritize accordingly.

We can use the 4 main strategies below to improve cash flow forecasting accuracy: 1. Leverage Technology and Data: Use advanced financial tools (such as Excel), automation, and historical data to enhance accuracy and predict trends. 2. Collaborate Across Teams: Involve multiple departments and teams to ensure comprehensive input and consistent financial assumptions. 3. Focus on Metrics and Adaptability: Track key metrics (e.g., DSO) and update forecasts frequently to respond to changes. 4. Plan and Review Consistently: Regularly analyze forecast variances and maintain contingency reserves for unexpected cash shortfalls. The review can be done monthly, bi-weekly or weekly rather than quarterly.