What impact will digital transformation have on finance?
The aim of digital transformation within finance is to streamline data, making it more accessible and transparent. The process of digital transformation is particularly important if you operate in lots of different countries or have multiple companies that form part of a larger group. If different countries and companies are allowed to manage and report on data using different structures, then it becomes nearly impossible to create an overview of the whole business finances.
Digital transformation when done correctly allows businesses to create cash flow forecasts on a group level, instead of having to rely on each country or company within the group to provide their own forecasts. The time saved in creating forecasts and the reduction of miscommunication risks are just two of the key benefits for any large business that undertakes digital transformation.
Digital transformation when done correctly allows businesses to create cash flow forecasts on a group level, instead of having to rely on each country or company within the group to provide their own forecasts.
Digital transformation when done correctly allows businesses to create cash flow forecasts on a group level, instead of having to rely on each country or company within the group to provide their own forecasts.
How can businesses improve their cash performance?
Achieving strong cash performance requires two things. The first is collaboration between treasury, commercial and finance departments. Optimizing cash performance starts with having clear policies on payment terms when it comes to suppliers and customers, which can only be achieved by the different departments working together. The second is complete visibility of data. In particular, AR, AP, customer data and supply data. When businesses build data warehouses that contain all of these sources, it becomes far easier to assess cash performance. With just a few clicks, businesses can quickly see which invoices are outstanding and which customers are frequently not paying on time.
Once businesses have data transparency and visibility on a detailed level, it empowers ongoing collaboration between treasury, commercial and financial teams. On a regular basis they can review the data together, understand the context of what is happening because the commercial team are in the meeting, and then agree relevant action plans together. This quick, data-led decision making is crucial for achieving strong cash performance.
Once businesses have data transparency and visibility on a detailed level, it empowers ongoing collaboration between treasury, commercial and financial teams.
Once businesses have data transparency and visibility on a detailed level, it empowers ongoing collaboration between treasury, commercial and financial teams.
Who is responsible for creating a cash-first culture?
At the end of the day, profit and healthy margins are meaningless if they can’t be converted into cash. Having a cash-first attitude comes from the top down. If a business is serious about improving their cash flow, then the CFO needs to be setting the standard and have a laser focus on cash.
One of my preferred ways to improve cash performance is through factoring, where businesses can secure immediate working capital based on future income from accounts receivable or an invoice. It is not uncommon for businesses to have multiple factoring providers to help diversify their debt and prevent over-reliance on one bank.
It is not uncommon for businesses to have multiple factoring providers to help diversify their debt and prevent over-reliance on one bank.
Kristian Skovfoged
VP, Head of Group Treasury
It is not uncommon for businesses to have multiple factoring providers to help diversify their debt and prevent over-reliance on one bank.
Kristian Skovfoged
VP, Head of Group Treasury
ISS is a leading workplace experience and facility management company, who provides placemaking solutions that contribute to better business performance and makes life easier, more productive and enjoyable.
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